Hubbard Radio Washington DC, LLC. All rights reserved. This website is not intended for users located within the European Economic Area.
Hubbard Radio Washington DC, LLC. All rights reserved. This website is not intended for users located within the European Economic Area.
If your image of the typical federal bureaucrat is a plodding middle-aged man (or woman) who couldn’t make it big — or maybe even at all — in the rmeal world, think again. As in, how many rank-and-file millionaires are there where you work?
Thanks to a surging stock market and a steady-as-she-goes investment strategy, an eye-popping 16,475 federal workers now have Thrift Savings Plan accounts worth $1 million. And in some cases, much more.
Unlike the early days of the federal 401(k) plan, when all the big accounts belonged to wealthy political appointees (many of them lawyers turned federal judges) who brought their 401(k) and other retirement vehicles into the federal TSP, which has the lowest fees in the business.
The new crop of do-it-yourself millionaires nearly all has one thing in common. They’ve been investing since they first joined the government, they’ve stayed with the stock-indexed C and S funds, and they stayed with those funds, and continued to buy more each pay period, even at the bottom of the Great Recession. By contrast, hundreds of thousands of federal and retiree investors left the then-tanking stock-indexed funds and moved some or all of their money into the super-safe (super-dull) Treasury securities G fund. Even worse — at least so far — they continued to buy only G fund shares when the entire U.S. stock market (as covered by the C and S funds) was on sale.
The other thing the self-made TSP millionaires had in common is that if eligible, they took advantage of the 5 percent match the government puts into TSP accounts if investors put in at least that much. Over time, that match, the equivalent of a tax-deferred 5 percent pay raise each year, pays off big time.
So how big time?
Mike Causey is senior correspondent for Federal News Network and writes his daily Federal Report column on federal employees’ pay, benefits and retirement.
Follow @mcauseyWFED
Learn about everything from pay, benefits and retirement, to buyouts, COLAs and pay freezes. Call the show live Wednesdays from 10-11 a.m. at 202-465-3080 with your questions. Dial 605-562-0264 to listen live from any phone. Follow Mike on Twitter and send him an email with your questions and comments. Subscribe on Apple Podcasts or Podcast One.
Feb 26, 2021 | Close | Change | YTD* | |
---|---|---|---|---|
L Income | 22.3956 | -0.0246 | -0.10% | |
L 2025 | 11.2825 | -0.033 | -0.24% | |
L 2030 | 39.3109 | -0.149 | -0.32% | |
L 2035 | 11.7431 | -0.0487 | -0.35% | |
L 2040 | 44.2037 | -0.2012 | -0.37% | |
L 2045 | 12.0579 | -0.0584 | -0.39% | |
L 2050 | 26.2994 | -0.1372 | -0.41% | |
L 2055 | 12.7194 | -0.0908 | -0.44% | |
L 2060 | 12.7194 | -0.0907 | -0.44% | |
L 2065 | 12.7194 | -0.0905 | -0.44% | |
G Fund | 16.5337 | 0.0015 | 0.07% | |
F Fund | 20.7403 | 0.1701 | -0.71% | |
C Fund | 56.8721 | -0.2653 | -1.01% | |
S Fund | 80.2962 | 0.2929 | 2.85% | |
I Fund | 35.7955 | -0.5623 | -1.09% | |
Closing price updated at approx 6pm ET each business day. More at tsp.gov * YTD data is updated on the last day of the month. |
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