By now most federal and postal investors are aware that a growing number of their colleagues are self-made millionaires. Their high point, so far, was last September when there were 34,128 in the club. As of Dec. 31 it has dropped down to 21,432.
The average Thrift Savings Plan balance for Federal Employees Retirement System participants — 3.3 million people — was $138,933 in January. That compares to an average TSP account balance of $146,642 for the 314,193 Civil Service Retirement System participants.
All the members of the millionaires club, except for a few millionaires who brought the money into government when they are appointed to elected to their jobs, have a couple of things in common. They’ve been in it for the long-haul, an average of 30 years. And they invested heavily in the C, S and I stock indexed funds and stuck with them during Great Recession of 2008-2009 when the stock funds were on sale.
The record-long bull-market pushed many into the millionaires club.
But it is nice to hear how they did it and to know it can be done. Here’s an email from Steve, a long-time fed who is retired, happily, and wanted to share part of his story:
“I know you get lots of these stories, but I thought I’d toss mine in. I started at ‘zero’ about age 35, having endured the Reagan cuts, extensive unemployment, and a return to school. Totally broke, I was fortunate enough to get a decent job with the federal government. It was right after FERS became mandatory for all new hires, and I took full advantage.
“I put the lion’s share into the C fund as soon as it became available, and added the S and I funds when they became available. I put in the maximum contribution in every paycheck, and when the ‘catch up’ rules allowed older workers to add more, I did.
“My account dropped quite a bit in 2008 and early 2009. A coworker said, ‘You should get your money out [of the C fund] while you still have any left.’ I said, ‘I rode it down and I’ll ride it back up’ and stayed the course, continuing to invest in C, S and I funds.
“In 2014, at age 62, after 27 years of service, I retired. The ongoing budget and political fights had rendered my work unsatisfying and I had family issues to attend to. Thanks to good savings habits and frugality I have not had to withdraw anything from my TSP yet. I checked my balance yesterday, and it was about $1,225,000.
“So, even a late start can lead to success with the right approach.”
Outside of a lab, only two animals can contract leprosy: humans and armadillos. There are about 150-200 new cases in the U.S. each year but humans are about 95 percent immune to the disease, even if they interact with an armadillo.