So how’s the retirement nest egg you’re building one paycheck at a time going? For a lot of rank-and-file federal and postal workers willing to play the long investment game, the answer is “very well.”
Despite an at-times gut wrenching stock market, the number of active and retired federal workers with $1 million-or-more 401k accounts is getting bigger and bigger. And it’s not because of big salaries, bonuses or pay raises! Check out the numbers:
At the end of September there were 39,399 individuals with Thrift Savings Plan accounts worth at least $1 million. That includes one long-time investor whose TSP balance stood at $6,965,163. One of the biggest guessing games in government is figuring out who she or he is.
In March of this year the number of TSP millionaires was 32,638, and that was up from 23,098 in March 2018.
Overall the TSP, which many experts say is the best 401k-type plan in the nation, has 5,584,196 participants who have been investing on average about 11 years. Workers under the Federal Employees Retirement System who invest at least 5% of pay qualify for a government match of 5%. That and the low administrative fees of the program have drawn praise of such legendary investors as Vanguard’s John Bogle and Warren Buffet.
While much of the focus is on Club Mill membership, the real story is how close tens of thousands of steady, long-time investors are to joining it. As of last September there were 67,964 current and former feds with account balances ranging from $750,000 to $999,000. They have been investing an average of 27 years and most are in the stock-indexed C and S funds. They took a major during Great Recession of 2008-2009 but investors who kept buying shares got them at bargain prices. When the market started its record 10-plus year run in March 2009, many TSP accounts doubled in value.
Data from the Federal Retirement Thrift Investment Board shows there are 166,653 participants with between $500,000 sand $749,999 who have been investing an average of 24-plus years.
A whopping 1.4 million current and former feds have TSP balances of between $50,000 and $249,000, and more than 3.3 million people — many of them members of the armed forces who have accounts ranging from small, starter balances up to $50,000.
The TSP’s tale of the tape is remarkable. Government workers generally are well paid. But they aren’t the best paid in the nation in many job categories. For the most part their enviable account balances reflect steady investing, not great wealth.
At the beginning of the TSP all of the millionaires were either political appointees who came in at cabinet level or other top jobs and brought their outside retirement nest egg into the TSP. Many others were super successful attorneys appointed to federal judgeships, also members of the House and Senate. Despite what some critics say about some elected politicians or political appointees, the vast majority of those people were and are very successful and smart, smart enough to appreciate the oversight applied to all TSP operations. And its low, low fees over time can dramatically boost or reduce the value of the account.
The vast majority of TSP millionaires are rank and file workers who’ve been investing close to 30 years on average. Virtually all of them are heavily, or exclusively, invested in the federal 401k plan’s C and stock, large and small cap, funds. During the Great Recession, tens of thousands of TSP investors fled the declining stock market. Most moved some, or all, of both current accounts into the treasury securities G Fund. Many also stopped buying stock funds via payroll deduction during the period when shares were, in effect, on sale because the market was down. Some people still haven’t returned to the stock funds. But a lot of people rode out the Great Recession and are seeing added dollar signs in their TSP account balances today.
Sweet food can taste bitter immediately after brushing your teeth because most toothpastes contain the ingredient sodium laurel sulfate. This is a surfactant, or a type of soap, that while cleaning teeth also suppresses the receptors on the taste buds that can detect sweet flavors. SLS also breaks up phospholipids, the fatty compounds that help reduce bitter tastes. So if you drink orange juice, for example, which has a mixture of bitter and sweet, right after a teeth brushing, you will only taste the bitter.