The average TSP balance for a 60-year-old federal employee hovers around $200,000, per 2024 Federal Retirement Thrift Investment Board data. Comfortable retirement? Maybe, depending on lifestyle and location. But more employees are finding themselves in the “TSP Millionaires Club” — a group that grew to over 100,000 members by 2023.
By The Numbers
- TSP Millionaires: More than 155,000, representing about 2% of the 7.1 million account holders.
- Accounts with $750,000–$1 Million: Increased by 14,000, reaching about 122,000.
- Accounts with $500,000–$750,000: Rose by 20,000 to approximately 245,000.
- Accounts with $250,000–$500,000: Grew by 17,000 to around 592,000.
TSP Investment Strategies
Max Out the Government Match: The TSP’s 5% match is free money. For a $100,000 salary, contributing 5% ($5,000) nets another $5,000 from Uncle Sam annually. The Federal Employees Retirement System (FERS) assumes everyone grabs this perk, yet some still don’t — a costly oversight.
Smart Risk Allocation: The TSP’s G Fund (government securities) is ultra-safe but sluggish, averaging 2-3% returns. The C Fund (tracking the S&P 500) has historically delivered 10% annually over decades, though with volatility. Younger feds should lean heavily into stocks — say, 80% in the C Fund — shifting to safer options like the G or F Funds as retirement nears. The Lifecycle (L) Funds automate this shift, but aggressive growth seekers might prefer custom allocations with expert advice.
The Power of Time
A 30-year-old fed contributing $500 monthly to the TSP with a 5% match, earning 7% average returns, could hit $1 million by 65. Delay that start to 40, and the same contribution yields just $430,000. Time, not just money, is the millionaire maker.
Federal employees have a robust retirement toolkit, but the TSP’s flexibility makes it the wildcard. Whether aiming for a minimalist retirement or a seven-figure nest egg, the key lies in balancing debt, timing, and investment choices.
A Federal Retirement Consultant® can fine-tune your plan, but understanding these basics empowers feds to take charge of their financial future.
