[Tristan Lall]

If the ring matches one in a table in Machinery's Handbook—which it does—I'd just go with whatever tolerance they list. In this case the standard is MS 16624; I'd be completely unsurprised if McMaster was quoting its dimensions from that specification.

Originally Posted by Machinery's Handbook, 26th edition, page 1683

Source: Industrial Retaining Rings, 3100 Series. All dimensions are in inches. Depth of groove d = (D − G)/2. Thickness indicated is for unplated rings; for most plated rings, the maximum ring thickness will not exceed the minimum groove width (W) minus 0.0002 inch. Standard material: carbon spring steel (SAE 1060-1090).

Ring Free Diameter Tolerances: For shaft sizes 0.125 through 0.250, +0.002, −0.004; for sizes 0.276 through 0.500, +0.002, −0.005; for sizes 0.551 through 1.023, +0.005, −0.010; for sizes 1.062 through 1.500, +0.010, −0.015; for sizes 1.562 through 2.000, +0.013, −0.020; for sizes 2.062 through 2.500, +0.015, −0.025; for sizes 2.559 through 5.000, +0.020, −0.030; for sizes 5.250 through 6.000, +0.020, −0.040; for sizes 6.250 through 6.750, +0.020, −0.050; for sizes 7.000 and 7.500, +0.050, −0.130.

Ring Thickness Tolerances: For shaft sizes 0.125 and 0.156, ±0.001; for sizes 0.188 through 1.500, ±0.002; for sizes 1.562 through 5.000, ±0.003; for sizes 5.250 through 6.000, ±0.004; for sizes 6.250 through 7.500, ±0.005.

Groove Diameter Tolerances: For shaft sizes 0.125 through 0.250, ±0.0015; for sizes 0.276 through 0.562, ±0.002; for sizes 0.594 through 1.023, ±0.003; for sizes 1.062 though 1.500, ±0.004; for sizes 1.562 through 2.000, ±0.005; for sizes 2.062 through 5.000, ±0.006; for sizes 5.250 through 6.000, ±0.007; for sizes 6.250 through 7.500, ±0.008.

Groove Width Tolerances: For shaft sizes 0.125 through 0.236, +0.002, −0.000; for sizes 0.250 through 1.023, +0.003, −0.000; for sizes 1.062 through 2.000, +0.004, −0.000; for sizes 2.062 through 5.000, +0.005, −0.000; for sizes 5.250 through 6.000, +0.006, −0.000; for sizes 6.250 through 7.500, +0.008, −0.000.

(All dimensions in inches; emphasis added.)

So, if you stack up the tolerances of the ring and the groove, it looks like they recommend quite a tight fit in terms of end play.

Realistically, it shouldn't matter too much, as long as you're not loading the ring anywhere near its limit. Your case for sacrificing a bit of load capacity for ease of assembly is probably a good one, in that case. If this was holding a wheel on, I would follow the specification carefully.