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CRS Report: Federal Employees' Retirement System: The Role of the Thrift Savings Plan (PDF)
Congressional Research Service [CRS]Link to more items from this source
Mar. 20, 2015

25 pages. "The [Thrift Savings Plan (TSP)] is a key element of the [Federal Employees' Retirement System (FERS)], especially for workers at the upper ranges of the federal pay scale. The Social Security benefit formula is designed to replace a greater share of income for low-wage workers than for high-wage workers. The FERS basic annuity will replace about 32% of final salary for an employee retiring at the age of 62 with 30 years of service. Higher-wage federal workers need to contribute a greater percentage of pay to the TSP to reach the same level of income replacement as lower-paid workers can achieve from just the FERS retirement annuity and Social Security. At an annual rate of return of 6.0%, income from the TSP can replace about 33% of final pay for a federal employee who contributes 10% of pay over 30 years." [Report RL30387, Mar. 10, 2015]

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