Marcus is 61, a GS-13 with 29 years of service, and he has just opened his TSP statement. The balance reads $612,000. A coworker told him over lunch that he needs a million to retire. Another said half that is plenty. By dinner he has stopped trusting either of them, and so has his spouse.

If that sounds familiar, you're not behind. You're just working with benchmarks built for people who don't have a pension. Let's sort out which ones matter.

What the common benchmarks say

The rule of thumb you'll hear most often comes from the private sector: roughly 8 times your salary saved by 60, and 10 times by 67. For someone earning $100,000, that's $800,000 at 60.

Those targets assume Social Security and personal savings carry the entire load. They are a reasonable starting point, but they weren't designed with a FERS annuity in mind.

Balances in the 60s also vary enormously. Plan-wide averages get pulled up by a small number of very large accounts, so the average is a poor yardstick. The median is lower, and what you actually need depends on your pension, your spending, and when you claim Social Security. Treat any national table as a mirror, not a grade.

Why FERS changes the math

Under FERS, the basic annuity is generally 1% of your high-3 average salary for each year of service, or 1.1% if you retire at 62 or later with at least 20 years. Retire at your minimum retirement age (MRA) with 30 years, or at 60 with 20, and you may also receive the FERS special retirement supplement until 62. It approximates the Social Security you earned during federal service.

The TSP is the third leg of a stool that already has two sturdy ones. So a FERS employee with 3 or 4 times salary in the TSP can be in better shape than a private-sector worker with 8 times salary and no pension.

CSRS employees run on a different formula entirely, and many aren't in the TSP at the same scale. If that's you, your benchmarks look different again.

Three numbers worth tracking instead

1. Your income replacement ratio

Add up the guaranteed income you expect: FERS annuity, supplement if eligible, and Social Security. Then see what share of your current take-home pay it covers.

Return to Marcus. His high-3 is $104,000. Thirty years of service at 1% gives him about $31,200 a year, or $2,600 a month. If he retires at 62, he's likely eligible for the supplement as well. His TSP at $612,000, drawn at around 4% a year, adds about $24,500. Before Social Security, that's roughly $55,700 a year, a little over half of his salary. After taxes, and with no more payroll deductions, retirement spending often needs less than 100% of working income. Many planners aim for 70% to 80% of pre-retirement income, but your own budget matters more than the rule.

2. Your sustainable withdrawal rate

The classic starting point is 4% of the balance in year one, adjusted for inflation afterward. It's a guide, not a guarantee. If you retire at 57 or 58, a lower starting rate may be wiser, because your money has to last longer. If Social Security and a pension cover most of your essential expenses, you can reasonably be more flexible.

3. Your allocation

This is where people in their 60s get tangled, so it gets its own section.

Allocation near the finish line

The danger zone is the five years on either side of retirement. A big market drop early in retirement, while you're also withdrawing, can do lasting damage. Planners call it sequence-of-returns risk.

The answer isn't to run to the G Fund and stay there forever. A retiree at 62 might need this money for 30 years or more. Inflation is a real risk too.

A common approach is to hold a few years of expected withdrawals in safer funds (G or F) and leave the rest invested for growth in C, S, and I. The L Funds do this shift for you automatically, moving toward the G and F funds as the target date nears. The TSP's L Income Fund is the most conservative option for people already drawing money out.

There is no single right mix. Someone with a large pension and a high tolerance for risk can hold more stock than someone relying heavily on TSP withdrawals.

Use your last working years

The 60s are often your highest-earning years, and the tax code gives you extra room. Participants 50 and older can make catch-up contributions beyond the standard limit. Under current law, people aged 60 through 63 may qualify for an even higher catch-up amount. Limits change annually, so check tsp.gov and irs.gov for this year's figures before adjusting your election.

A few other things to review:

  • Traditional versus Roth. If you expect a lower tax bracket in retirement, traditional contributions make sense. If your pension, Social Security, and withdrawals will push you high anyway, Roth may be worth considering.
  • Agency matching. Confirm you're getting the full match. Skipping it in your final years is leaving pay on the table.
  • FEHB eligibility. To carry health coverage into retirement, you generally need to have been covered for the five years before you retire. Check this early.

Mistakes I see in the last stretch

People cash out too early or too much. Once you separate from service, the TSP gives you several options: partial or full withdrawals, installment payments, or an annuity through the TSP's annuity vendor. Leaving money in the TSP is allowed, and for many retirees it's a good call given the plan's low expense ratios.

Watch the tax rules, too. Withdrawals from a traditional balance are taxed as ordinary income. If you leave federal service in or after the year you turn 55, the 10% early withdrawal penalty generally doesn't apply. Otherwise, it applies until 59½. Required minimum distributions begin at 73 for some and 75 for those born in 1960 or later, so check your birth year against the current rules.

Another common error is ignoring Social Security timing. Claiming at 62 permanently reduces the benefit. Waiting until full retirement age, or even 70, raises it. For a married couple, the higher earner's choice affects the survivor benefit too.

A practical checklist for the final two years

  1. Request a FERS annuity estimate from your agency's HR office.
  2. Pull your Social Security statement from ssa.gov.
  3. List your actual monthly expenses, not guesses.
  4. Run your TSP withdrawal scenarios at 3.5%, 4%, and 4.5%.
  5. Review your fund mix and decide how many years of withdrawals you'd like in safer funds.
  6. Meet with a fee-only planner if your situation involves a spouse's pension, a big mortgage, or military buyback decisions.

Marcus didn't need a million dollars. He needed to know what he'd spend, what was guaranteed, and how much the TSP had to cover. Once he did that math, the number on his statement stopped being a verdict and became a plan.

Your benchmark isn't a national average or a coworker's opinion. It's the gap between what you'll spend and what your guaranteed income covers, and your TSP's job is to fill that gap.