Projecting Account Balance For Retirement

[zbwmy]

imported post

When you guys daydream about how big you TSP Fund will be on the day you retire, what method of rate of return are you projecting. It is my understanding that their are two methods. One is the historical rate of return, ie. stocks tend to return say 10% over the last thirty years so you plug in 10% into your projections. The other is real rate of return, ie. historical rate minus inflation. So you take the 10% subtract the inflation rate of say 3% and plug 7% into all you projections.

I have always used the historical rate and new my projections were in todays dollars and would need to adjusted for inflation later. Latley I have been discovering a large number of retirement guru's using the real rate of return method.

What do the 104 members of this Forum do?

 

[tsptalk]

imported post

I know the Financial Futures software I haveon http://www.tsptalk.com/utilities.html talks in "real rate" terms. Have you tried that at all? It was written by a friend of mine who gave me permissionto make it availableon my site for anyone to use.

 

[Frizz B.]

imported post

I use my excel progam, I have each month calculated, at 12 % per year. I have 19 years left. I take the month that I am in and multiply that by 1.01 and add what I put in each month. I put that # in the first column and add that to the equation. When I turn 50 I will start adding $3000 to my account at the end of the years calculation. At the top of the page I have a box that copies the last box in my calculation so I can see what my retirement $$$ might be.