At the end of December 2016, there were 9,599 millionaires in the Thrift Savings Plan (TSP). Since that time, with the rising stock market over the past few years, the number of TSP millionaires among the federal employee population has exploded.
At the end of 2017, there were 23,962 TSP millionaires – an increase of almost 150% from two years before that date. At the end of 2018, with the stock market declining in value in 2018, the number of millionaires in the federal government’s TSP program declined along with the stock market. (The C fund declined 4.41% in 2018.)
As of December 31, 2018, there were 21,432 millionaires in the TSP. The average TSP millionaire has been contributing to the plan for almost 30 years (29.63).
The TSP participant with the largest account value has accumulated $6,086,238.
Keep in mind, if you happen to be one of these rigorous, successful savers, having a TSP account in excess of a million dollars does not translate into having that much money to spend. When the money is withdrawn, there will be taxes due to the federal government and, for some, taxes may also be due at the state government level. Retired employees are required to pay taxes on their TSP withdrawals.
A 1099-R form is issued in January showing an investor how much taxable income has been withdrawn from the TSP during the year. You will not have to pay taxes on any Roth contributions because taxes have already been paid.
Number of TSP Millionaires
Here is a tally of the number of TSP millionaires by year. In the earlier years listed, the data are not always taken on the same date so these figures are approximate.
| Year | Number of TSP Millionaires |
|---|---|
| 2018 | 21,432 |
| 2017 | 23,962 |
| 2016 | 9,599 |
| 2015 | 3,272 |
| 2014 | 4,167 |
| 2013 | 1,695 |
| 2012 | 562 |
| 2011 | 208 |
Account Balances in the TSP
Here is a breakdown of account balances in the Thrift Savings Plan and the average number of years participants have been contributing to the program in each account balance bracket.
| Account Balance | Number of Participants | Average Years Contributing to TSP |
|---|---|---|
| <$50K | 3,192,384 | 6.45 |
| $50k-$249K | 1,476,045 | 16.54 |
| $250k-$499k | 446,697 | 22.27 |
| $500k-$749k | 144,121 | 25.44 |
| $750k-999k | 52,062 | 28.02 |
| >$1 million | 21,432 | 29.63 |
| Total | 5,332,741 | 11.38 |
These figures include those in the FERS and CSRS retirement systems as well as those in the uniformed services. The totals do not include beneficiaries but do include rollovers from other qualified plans. TSP participants with civilian and uniformed services accounts have been grouped together to the reflect the total TSP investment per person.
The latest available average TSP balances for FERS, CSRS, and uniformed personnel are as follows:
| Total Participants | Average Balance | |
|---|---|---|
| FERS | 3,389,322 | $132,874 |
| CSRS | 315,647 | $141,094 |
| Uniformed Personnel | 1,369,646 | $23,981 |
For comparison, according to Fidelity Investments, the average 401(k) investor at Fidelity had $102,900 earlier in 2018 before the market dropped at the end of December.
We occasionally receive comments from readers to the effect that a federal employee cannot accumulate a million dollars or more unless they transferred money from a higher paying job outside of the federal government. On the other hand, we have also received notes from career employees who say they started investing early in their career and, as they neared the end of their career several decades later, they have a balance in excess of a million dollars.
Significant Factors Impacting Amount in Your TSP
Several factors appear to impact the amount of money ultimately available in a TSP whether the investor works for the federal government or in the private sector.
Do not put all of your investment in the G fund.
This is especially true for younger investors with a long career ahead of them.
Historically, money in stock funds has grown more than money invested in bond funds. Stocks do not go up every year and the G fund has never gone down in any year. Nevertheless, over time, the stock funds have always provided a better return.
Take advantage of the full match available from the government.
If you can afford to put the maximum into the TSP, you should do so. At the same time, avoid withdrawing money or taking out a loan against your TSP balance if you are able to do so as this will set back the progress in the growth of your money.
Start investing as early in your career as possible.
Time in the market is usually more important than timing the market. An investor who invests in the TSP stock funds throughout a career will often come out financially ahead of a person who invests larger amounts in the market for a much shorter time.
Our congratulations to all of the TSP investors who had accumulated at least one million in their Thrift Savings Plan. Combined with your federal annuity, your financial security will be much greater than most Americans.
