February 21, 2014
7:08 a.m.

Subject: Retirement Planning -- The TSP’s New Millionaires

The TSP's New Millionaires / Tammy Flanagan

Saving a million dollars for your retirement is quite an accomplishment. Saving a million dollars in an average of 25.7 years in the federal Thrift Savings Plan is a really big accomplishment. As of December 2013, more than 1,600 TSP participants can say that they have done just that. Some of these balances were started with seed money from other investments transferred from 401(k) plans, but there are some pure TSP millionaires. One TSP account holder has a balance of more than $3 million.

As for the rest of the more than 4.6 million participants in the TSP, the breakdown of balances looks like this:

• Under $50,000: 2,798,820
• $50,000 - $249,999: 1,424,999
• $250,000 - $499,999: 335,638
• $500,000 - $749,999: 71,272
• $750,000 - $999,999: 11,063

So the reality is that 98 percent of the TSP participants have less than $500,000 in their accounts. But many of them are still early in their careers, and thus are in position for outstanding growth in their account balances. One key is to start investing early. Even if you aren’t contributing 10 percent or even 5 percent of your salary to your TSP account, try to do 3 percent. When you get a pay increase, increase the percentage you contribute.