Rate of Return

[Bubba823]

For the smart people out there. How does one calculate the percent (%) of gain / loss for a specific period. I'm looking for the formula to get my TSP rate of return for 2022. Assuming my beginning balance on January 1, 2022 was $300,000, and my ending balance on December 31, 2022 is $250,000, how do I do it? Does the formula require subtracting contributions? I'm still making contributions. Thanks in advance.

[jimcasada]

It's easy for me, because I have two TSP accounts, and I always make the exact same changes to both. My old military account hasn't had any type of contributions or withdraws for at least the last 6 years, so don't have to figure in anything but my gains or losses of whatever funds I am in over time. Otherwise, I can't hardly make heads or tails of how to figure out such on this new TSP.gov website.

[jimmyk]

This is how I would calculate it.
Starting balance =$300000
Contributions over the yr = $10,000
Ending balance = $250,000

Formula = ((Ending balance - contributions)-Starting balance) / Starting balance
($250000-$10000) = $240000

$240000-$300000 = -$60000
-$60000/$300000 = -0.20 x 100 = -20%

[jimcasada]

But what throws things off a bit, contributions made during the year earn at different rates, depending on when they were made. For example take this year for most folks, contributions made earlier in the year probably made less earnings than those contributions made later in the year. I think the easiest thing is to open a fantasy account here and make changes to it that exactly match your real account. That's what I do.

[Bubba823]

This is how I would calculate it.
Starting balance =$300000
Contributions over the yr = $10,000
Ending balance = $250,000

Formula = ((Ending balance - contributions)-Starting balance) / Starting balance
($250000-$10000) = $240000

$240000-$300000 = -$60000
-$60000/$300000 = -0.20 x 100 = -20%

That makes sense to me. I am only looking for a ballpark figure, so this works. Thank you!

[jimmyk]

Sure. Jimcasada is correct though. There is error based on the return produced by contributions. What I posted was back of the envelope and ballpark.

[Scarfinger]

I took my year end balance for 2021 and my current balance today and put it in a % calculator

https://percentagecalculator.net/

I used the "What is the percentage increase/decrease" part of the calculator.

I am currently at (-) 4.9% for the year. Mainly because of contributions padding the loss. Otherwise I would be down closer to (-) 13% for the year.

[mhende2]

For most of us who are already retired it's definately not been a nice market this year, and not being able to add more funds to offset the drops makes it painful. Something to be prepared for and think about before retiring, the market doesn't always go up each year.
Let's go Brandon.