There are 48,000 federal and postal workers who’ve been contributing to the Thrift Savings Plan since it started in 1987. Over that 28-year period of steady investing, through good times and not-so-good times, 418 of those very smart, very farsighted feds now have TSP accounts worth $1 million or more.

The folks who run Uncle Sam’s in-house 401(k) plan don’t know the actual investment habits of the prudent feds. Whether they invested each pay period or whether some stopped investing and then returned. But they do know that the 418 plus who became millionaires are very wise. Luck and/or market-timing (buy low, sell high) had little to do with it. What many if not most of the investors did was stay the course. They couldn’t have jumped out of stocks when the market bottomed, then known when to come back without selling low and buying high.

If any of them had a “system” that allowed them to buy stocks when on sale and to know when to retreat to the super-safe (low interest) Treasury securities G-fund, they should have left the government long ago and prospered big time on Wall Street. Or at least have their own hedge fund.

What most investors know is that the stock markets rise and fall. For all kinds of reasons. They drop when a tsunami hits Japan, or a volcano in Iceland interrupts air traffic over the North Atlantic. Some investors are jittery over the outcome of today’s referendum in the United Kingdom that could take England, Scotland, Wales and Northern Ireland out of the European Union. There’s always something.

But steady investing over time pays off. Feds who panicked because of the Great Recession eight years ago and left the stock market missed the opportunity to buy low, that is get stocks that were on sale, during the slow but steady recovery.

Currently, the TSP has 4.9 million participants. Just over 400,000 of them are members of the uniformed services.

The participation rate of FERS employees in the TSP has remained steady at 89.3 percent. The participation rate for members of the military and uniformed services recently hit a high of 44.4 percent. That shows we’ve got some smart troops looking ahead and that all branches of the services are doing a good job informing their people about the importance of the TSP and its new Roth option.

The average account balance for FERS employee investors is $116,928 vs. an average of $120,046 (as of April) for CSRS investors.

Nearly Useless Factoid

By Michael O’Connell

Pistachios are green because they contain chlorophyll.

Source: The Kitchn

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