There are three ways federal investors can join the million-dollar Thrift Savings Plan club. Senior Correspondent Mike Causey says investing steadily produces t...
There are basically three ways to become a member of the fast-growing group of federal and postal workers who make up the millionaires club — people whose Thrift Savings Plan accounts (Uncle Sam’s version of a 401k plan) have hit the million-dollar mark. In one case, make that $5 million.
They are in order of difficulty:
In previous columns, we’ve broken down the number of TSP millionaires and those — about 20,000 —in the $750,000-to-$999,000 TSP balance range. Many are poised to join the club.
The vast majority of TSP millionaires invested from day one, did not try to time the markets and stayed with their plan during downturns. Here’s the tale of the tape from one brand-new TSP millionaire who had patience and did everything right, which often involved doing nothing other than staying the course.
Here’s his by-the-numbers story told in 5-year increments.
“I’ve just passed the 30 year mark — my definition is ‘Freedom Day.’
I have been a sustained TSP millionaire for about a year now. I’m currently in the L Income fund for protection, but probably will rebalance with my own percentages. Just don’t know what those will be.
Here’s my balance in five-year increments:
Government Service Anniversary Date
June 1987 — Began government service (Sunday — first day of pay period)
June 1992 — $22,185.23 (five years of service)
June 1997 — $90,231.77 (10 years of service)
June 2002 — $151,228.29 (15 years of service)
June 2007 — $347,346.87 (20 years of service)
Dec. 10, 2007 — $367,264.19 (Highest point before crash)
March 9, 2009 — $192,348.72 (Lowest point after crash)
Sept. 20, 2010 — $369,145.66 (‘recovery’ date from the previous high on 12/10/07 — took 2 years, 9 months)
June 2012 — $479,248.83 (25 yrs of service)
June 2017 — $1,136,577.98 (30 years of service)Keep up the good work informing us feds appropriately.”
—K
The best part is what he failed to do. Panic during the last “correction,” which was nearly 40 percent.
He said:
“I was either not smart enough, or froze in panic, so never moved any balance during the crash. I did as you and Arthur [Stein] said: Stayed put with 50/50 C & S fund. So I bought lower and lower every two weeks and the last five years shows the result. I can’t do percentages too well, but $479 to $1.1 is quite a healthy increase!”
By Jory Heckman
Theoretical physicist Stephen Hawking once hosted a reception for time travelers — but only advertised the event after it had ended.
Source: Huffington Post
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Mike Causey is senior correspondent for Federal News Network and writes his daily Federal Report column on federal employees’ pay, benefits and retirement.
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