TSP balance tops $113k: Are you smart, lucky or both?

By Mike Causey
Federal News Radio

When it comes to prepping for retirement, federal workers are doing much better than their private sector counterparts. For instance:

  • When they retire from the government, workers are guaranteed a lifetime annuity with the option to provide a survivor benefit. The majority of federal workers retired under the old Civil Service Retirement System. It has a defined benefit. Someone age 55 with 30 years service could be expected to get a monthly annuity that would start out at about 56 percent of their final salary. CSRS benefits are fully indexed to inflation so each year, assuming costs go up, retirees get a cost-of-living adjustment (COLA) equal to the rise in living costs. In times of deflation (declining prices), annuities are not impacted.
  • The majority of current federal and postal workers are under the less-generous Federal Employees Retirement System. FERS provides about half the benefit of an equivalent CSRS employee. But FERS employees are eligible for Social Security benefits, and they get matching contributions to their in-house 401k plan (the Thrift Savings Plan) of up to 5 percent of salary. FERS retirees also get a catchup with inflation COLAs each January, but under a formula that can reduce the actual increase by 1 percentage point.
  • Feds (and military personnel) love the TSP. As of Jan. 31, their accounts were valued at $436.88 billion (with a B). That makes it king of the 401ks. The low administrative fees (lowest in the business) make it so attractive that many high-income people coming into government transfer their outside retirement accounts into the TSP.
  • The average TSP for investors under the newer FERS system is $114,001.
  • The average TSP account balance for investors under the old CSRS program is $113.717.
  • The average 401k account balance for people in the private sector is $91,300.
  • Many if not most people in the private sector either don’t have a 401k plan or don’t have a defined benefit retirement plan. Some don’t have either and have little or nothing (other than Social Security) set aside for their retirement years.


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