More than 10,000 federal and postal workers currently have Thrift Savings Plan account balances worth between half a million dollars and just over $3 million.

The numbers illustrate that a growing number of federal-postal workers are well on their way to joining the elite club of civil servants who have 7-figure balances in Uncle Sam’s in-house version of a 401(k) plan.

And in most instances the 7-figure feds have done it the old-fashioned way. They’ve invested the maximum allowed by law, and invested at least 5 percent in order to qualify for the 5 percent match available to most federal and postal workers.

Under IRS rules, individuals can invest up to $16,500 of their salary this year into the TSP. Workers who are 50 or older, or who turn 50 anytime this year, can invest $5,500 on top of the regular $16,500 amount.

So if you can afford it, you can sock away a lot of money each year, on a pre-tax basis in the TSP which has the lowest administrative fees in the mutual fund business.

Some have done it by investing in a combination of the higher-risk/higher-reward stock-indexed C, S and I funds. Some have done it by sticking with the less exciting but super safe Treasury securities G-fund. Others by a combination of all the funds. Or by putting their money in the self-balancing L-funds targeted to the date when they will begin spending down their TSP accounts.

Currently the TSP has one individual with an account balance of over $3 million; five who have between $2 million and $3 million; 69 with accounts currently worth between $1 million and $1.9 million and 65 with accounts worth between $900,000 and $999,000.

Most of the investors with huge accounts are people who came into government after successful careers in the private sector and transferred their retirement accounts into the TSP.

But a growing number of long-time investors in the 23-year old TSP made their money the old-fashioned way. They maxed out the amount they contributed to the plan, used dollar cost averaging (that is investing the same amount each pay period regardless of whether they were buying high or low) and stuck with the plan.

Right now there are more than 200 feds with account balances between $800,000 and $899,000; just over 2,100 who have accounts valued between $600,000 and $699.999.99 and a surprising 7,020 investors whose current TSP balances are more than half a million dollars but under $599,999.99.

At least 45 members of the half-million dollar club are under the old Civil Service Retirement System or members of the uniformed services. CSRS employees have a more generous defined federal annuity benefit, but unlike their counterparts under the Federal Employees Retirement System they don’t get any matching contributions. CSRS employees can invest the same amounts as FERS employees, but FERS workers get an automatic 1 percent contribution even if they don’t invest, and up to 5 percent if they invest that amount.

Life After Retirement

Ever wonder what, if anything, you will do after retirement? If that covers you, a spouse or friend, check out today’s For Your Benefit radio show today at 10 a.m. EDT. Hosts Bob Leins and Ann Vincent will interview Michael Townshend about what your next step should be. He’s a well-known life-career-retirement coach and he’ll talk about leveraging your federal experience and contacts for your next adventure. You can listen on your computer anywhere or locally at WFED 1500 AM on the radio.

To reach me: mcausey@federalnewsradio.com

Nearly Useless Factoid
by Suzanne Kubota

Just in time for Mother’s Day, NewScientist.com reports female sharks can produce healthy young without a male.

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