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TSP Growth Formula:
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The TSP (Thrift Savings Plan) growth formula calculates the future value of retirement savings by accounting for initial investment, compound interest, and regular contributions. It helps estimate how much your savings will grow over time.
The calculator uses the TSP growth formula:
Where:
Explanation: The formula calculates compound growth on your initial investment plus the future value of regular contributions made over time.
Details: Accurate TSP growth estimation is crucial for retirement planning, helping you determine if you're on track to meet your financial goals and make informed decisions about contribution amounts.
Tips: Enter present value in dollars, annual interest rate as a percentage, number of years, and annual contributions in dollars. All values must be valid positive numbers.
Q1: What is the difference between TSP and other retirement plans?
A: TSP is a retirement savings plan for federal employees and members of the uniformed services, similar to 401(k) plans in the private sector but with lower fees.
Q2: How often should I recalculate my TSP growth?
A: It's recommended to review your TSP growth annually or whenever your financial situation changes significantly.
Q3: Are TSP contributions tax-deferred?
A: Traditional TSP contributions are made with pre-tax dollars and grow tax-deferred, while Roth TSP contributions are made with after-tax dollars but qualified withdrawals are tax-free.
Q4: What is the maximum contribution limit for TSP?
A: Contribution limits are set annually by the IRS and typically increase each year. Check current IRS guidelines for the most up-to-date information.
Q5: Can I borrow from my TSP account?
A: Yes, TSP participants can take loans from their accounts under specific conditions, but this may impact your long-term growth potential.