How Much Money Will I Receive in Retirement?

How much income will you receive after you retire? How much can you withdraw from your retirement accounts so that you will not outlive your retirement savings?

If you are a regular FedSmith reader, hopefully you are interested in all parts of your career (including retirement) and have a pretty good answer to this question.

We can determine what we will get from our CSRS or FERS annuity relatively easily. Most agencies have Human Resource websites that will give you a good estimate as to how much you will have when you retire. When you get close to retirement, you can have a human resources specialist compute a retirement benefit for you, just to be sure.

We also have an easy way to figure out what we are entitled to from Social Security. If you are a FERS employee, chances are that your annual Social Security Statement is correct. Do be aware, however, that the benefits it lists for various ages (i.e., 62, your full retirement age, and 70) are based on the assumption that you will continue to work up until those ages, and that you will continue to make a salary similar to today’s.

If, however, you are CSRS, CSRS Offset, or a FERS Transferee, you may be hit by the Windfall Elimination Penalty (WEP). The annual Social Security Statement does not factor in the WEP, so you may be entitled to less than the statement indicates. The website of the Social Security Administration ( has a WEP calculator that allows you get a better handle on what you will get from Social Security.

Determining how much income we will receive from the TSP is a little trickier. If your agency provides an annual benefit statement, it almost certainly lists potential TSP income as a level-payment annuity. The problems with this are that TSP annuities are the least popular withdrawal choice and that a level-payment annuity is not indexed for inflation. How can you get a better estimate?

You can go to the TSP calculator on the TSP website (there is a link to it on the TSP homepage) and compute a different method of payment. You might want to compute an increasing-payment annuity. Even if you choose a different method of withdrawal, the amount of the increasing-payment annuity estimate will factor in an inflation increase of roughly 3% per year. You may be surprised at how much lower the increasing-payment figure will be than the level-payment figure.

You can take the advice on many financial planners who suggest that an annual withdrawal rate of 4% to 5%, increased each year by the amount of inflation will have excellent odds of lasting you for your entire retirement. Planners use Monte Carlo Simulators to come up with these percentages.

The simulator runs hundreds, or thousands, of possible investment scenarios, from the very positive to the very negative and gives odds of running out of money in a fixed period of time, usually 30 years. Assuming a portfolio that is 60% stocks and 40% fixed income investments, the odds of running out of money in 30 years at a 4% withdrawal rate is less than 5%. Using the same assumption, the odds of running out of money at a 5% withdrawal rate is less than 10%. In addition, there is an excellent chance that you will have money left over for heirs.

Agencies can request to have John Grobe, or another of Federal Career Experts' qualified instructors, deliver a retirement or transition seminar to their employees. FCE instructors are not financial advisers and will not sell or recommend financial products to class participants. Agency Benefits Officers can contact John Grobe at to discuss schedules and costs.

About the Author

John Grobe is President of Federal Career Experts, a firm that provides pre-retirement training and seminars to a wide variety of federal agencies. FCE’s instructors are all retired federal retirement specialists who educate class participants on the ins and outs of federal retirement and benefits; there is never an attempt to influence participants to invest a certain way, or to purchase any financial products. John and FCE specialize in retirement for special category employees, such as law enforcement officers.