You're Probably Not Going to Die at 85. So Why Is Your TSP Plan Built That Way?

August 06, 2025

Most retirement plans are built on a quiet assumption:

You'll be gone by 85.

The calculators say it. The withdrawal rates reflect it. Even the way the IRS sets Required Minimum Distributions (RMDs) implies it.

But, if you're a healthy, career federal employee (with access to FEHB, a stable pension, and above-average income) you're statistically more likely to live well into your 90s.

And yet… most TSP drawdown strategies are designed to run out before you do.

The Longevity Lie That’s Costing You More Than You Think

Most retirement models still use average life expectancy data. The problem?

You’re not average.

  • For a 62-year-old healthy federal retiree today, there's nearly a 60% chance of living past 90.

  • If you're married, there's an 80% chance one of you will live past 92.

  • Many federal retirees today could reasonably plan to see age 95–100—especially women.

So what happens if your TSP plan assumes you'll die at 85?

👉 You underspend in your healthiest years, then scramble or stress later.

👉 You delay joy, hoard money, and retire with freedom—but never fully use it.

👉 You miss key opportunities to optimize your lifestyle, travel, or support your family while you’re still able to enjoy it.

The Real Risk Isn’t Dying Too Early—It’s Living Too Long

Let’s reframe this:

Outliving your money is a bigger risk than overspending.

And ironically, being too cautious early in retirement is one of the biggest causes of that outcome.

Many federal retirees:

  • Stick rigidly to a 4% rule—even when markets are strong

  • Let inflation quietly erode purchasing power over decades

  • Treat their TSP like a museum piece, not a tool

But here’s what the wealthiest (and often happiest) retirees do differently…

They Front-Load Joy—and Build for Longevity, Too

The top 1% of retirees don’t try to make their TSP last “just long enough.”

They design withdrawal strategies that align with life’s energy curve—not just the IRS’s timeline:

  • Spend more in your 60s and early 70s, when your health, energy, and interests are at their peak.

  • Use "time segmentation" buckets—early, middle, and late retirement phases—with different drawdown rates for each.

And hedge the “what-if-I-live-to-100” scenario with tools like:

  • Deferred income annuities (DIAs)

  • Long-term care insurance

  • Roth conversions to control tax drag later in life

  • Social Security timing to lock in higher lifelong benefits

They don’t fear longevity—they plan for it strategically.

Ask yourself:

  • Is your current strategy based on your goals, or default software settings?

  • Are you accounting for the cost of long life—not just in money, but in joy delayed?

  • Have you re-run your retirement plan with an assumed age of 95 or even 100?

Because the reality is… you probably won’t die at 85.

And if you don’t—your TSP needs to be ready.

—FWR