Thread: A million dollar TSP account

Please entice him to join our board so he can talk to us. I'd like to know how he thinks and reacts to certain situations.

Originally Posted by DCguy

I go to tsp.gov and use the calculator to figure out how long it will take to accumulate a million dollars in tsp at 5% annual rate of return. It says under fers, it takes 27 years. If that is indeed true, most tsptalkers should be millionaires because average tsptalker annual rate of return seems to be much higher than 5%. But how come no one here seems to have a million dollar account?

DC Guy,

The million dollar account is a necessary reality. If your a Gen X'er and your the primary breadwinner for your family you probably should be looking at that as a minimal milestone. It also depends on what you expect your standard of living to look like. Example, If you want to be at 100% of your pre retirement take home pay.

Figure at retirement you want to pull 6% out of your account every year and have the principal grow with inflation at 2.5% - then your account needs to return 8.5% a year (close to the S&P500). Now consider that you probably want that 6% to account for 50% of your income.

(current take home pay x 1.5 (inflation) /2 (50% - half of your pre tax take home pay at retirement))/.06 (6% your going to extract from the principal) = what you need at retirement. I'll use a 50K example (($50K x 1.5)/2)/.06= $625K

Take a person with a few years in and 20 to go and maxing out the IRS contribution rate, with a 100K in their account. Lets consider two scenarios:

- a timer at 16%, will hit the 1 million mark in 11 years - and will retire with 4 Million in 20 years.

- a timer at 9.0%, would take 16 years to hit the 1 Million mark and would total about 1.4 Million in 20 years.

Here's a great tool to play with -

http://personal.fidelity.com/toolbox...h/growth.shtml

Originally Posted by ATCJeff

I know one who has 6.8 million. He was one of about 1500 Federal employees who had their retirement accounts screwed up when they converted from CRS to FERS. Part of the settlement was they got their TSP accounts restore to the amount if they had been in the highest yielding fund each month, then each day when TSP rolled over to daily valuations.

Doc at ZTL??