Is there a millionaire inside you struggling to get out? If you work for Uncle Sam, the answer may be yes.

Thanks to a generous government match, and a well-publicized program endorsed by unions and professional groups, there are currently 2,675 active and retired feds with $1 million or more in their 401(k) plan accounts. The federal 401(k) is called the Thrift Savings Plan. It was set up by Congress and run by the Federal Thrift Investment Retirement Board. Unlike other federal operations, which serve a variety of customers, consumers and special interest groups, the FRTIB has but one client: Active and retired federal workers and military personnel who invest in it.

And while they aren’t TSP millionaires yet, many federal and postal workers are working on it. There are currently 102,910 active and former feds whose account balances exceed $500,000. The TSP has 4.6 million account-holders, many of them retired.

Most current federal workers are under the FERS retirement plan. While it provides a less generous federal annuity than the CSRS program it replaced, FERS workers are eligible for a match from the government of up to 5 percent if they invest at least that amount.

Currently, members of the military do not receive any matching government contributions. Many think they, of all people, deserve it. Most of the opposition to giving them the extra contribution comes from high-level military bean-counters at the Pentagon.

Members of Congress and staffers can belong to the TSP. Many do. Since nearly half the Congress is already composed of millionaires, it’s safe to assume some of them have hefty TSP accounts.

Many other feds who are TSP millionaires are top lawyers, doctors and judges who transferred large retirement accounts into the TSP when they joined the government. Like regular feds, they like the lowest-in-the-business administrative fees charged customers, and the availability of the super-safe-never-has-a-bad-day Treasury securities G-fund.

So want to be a TSP millionaire? Yesterday’s column gave a real life tutorial by a been-there-done-that guy. A real-life fed who spent 27 years in government. He got into the TSP from day one, maxed out his contributions and got a part-time job to supplement his reduced paycheck and stayed with stock funds (mostly the S&P 500 C fund) through good times and bad. When it was earning 30 percent, he rejoiced and kept buying. When the stock market tanked a few years back, he kept buying, investing the same amount of money with each paycheck but getting more shares with each purchase.

NEARLY USELESS FACTOID:

By Michael O’Connell

John Jacob Astor, the German-born merchant, fur trader and investor, was the first multi-millionaire in the U.S. His net worth is estimated at $110.1 billion in 2006 dollars.

Source: Wikipedia.

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