The TSP’s all-in-family millionaire’s club

Do you and your significant other want to live a comfortable life in retirement? Without fear of running low on, or out of, money?

One way to do it is to marry a fellow fed who also has a guaranteed lifetime annuity. Plan carefully. Max out your dual contributions to the Thrift Savings Plan.

And stay married. To the same person. Very important.

By now, most government workers know that careful planning (and a little luck) can turn themselves into self-made millionaires. This time last year, there were more than 16,000 TSP millionaires. Aside from a few wealthy political appointees from the current and past administrations, the vast majority of people with million-dollar accounts were individuals with  careers averaging 28 years, who invested in the C and S stock indexed funds through good times and bad, and who did not panic and retreat to the “safety” of the treasury securities G fund during the Great Recession.

They kept investing the same amounts (more in some cases) during those down years buying shares at bargain prices. Thanks to the recovery more than 20,000 now have balances of between $750,000 and $999,000. As the stock market continues to surge, more move into the self-made millionaires club every day.

Last week, we heard from a very wise couple who together have made it to Club Millionaire. Here’s how they did it:

“In previous columns, you missed a small subset of TSP millionaires: Couples who both work(ed) for the feds, and their TSPs add to well over $1,000,000 together, but not separately. It is very ‘tasty’ not being poor, but not rich either, but comfortable.

It took a lot of TSP catch-up, S or C fund 100 percent (still), the searing lessons of losing  two years’ gross (not net) salary and $50,000 retirement savings “playing” the stock market, to learn there are far smarter people out there, high-frequency traders nanoseconds ahead, complex methods to separate you from your hard earned cash, including fraudsters who forge signatures, TANSTAAFL, (There ain’t no such thing as a free lunch).

It took time discipline, luck and consistency among others to recover, and maxing out the TSP, including catch up and still staying 100 percent C and S.

I would also invite you to take the 2,404 days of data of the S and C funds (1/2/2008 to present), take a simple moving average of 20 days, bound it with a +/- 2 standard deviation envelop (95%) and graph, You will see an almost steady rise from 1/2/2008 to present, with 2 “blips” that if ignored are easily recovered from, and if combined with steady contributions. and TSP catch-up provide for a comfortable retirement…

I took to heart the adages:

  • ‘Cut your losses, and let your profits ride’
  • ‘Why sell a winner? It’s winning,’ ‘
  • ‘Traders lose money, they buy high and sell low, with great consistency’
  • ‘When in danger, or in doubt, run in circles, scream and shout, (and don’t trade, go outside and take a walk instead.’

Retired Robert

Nearly Useless Factoid

By Jory Heckman

The sum of all numbers on a roulette wheel is 666.

(Source: Wikipedia)

Related Stories

Comments

Your Turn with Mike Causey

WEDNESDAYS at 10 A.M.

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.

Sign up for breaking news alerts

THRIFT SAVINGS PLAN TICKER

Dec 01, 2020 Close Change YTD*
L Income 22.0880 0.0454 4.04%
L 2025 10.9632 0.0514 -
L 2030 37.9432 0.2193 8.24%
L 2035 11.2965 0.0714 -
L 2040 42.3740 0.2915 9.51%
L 2045 11.5224 0.0845 -
L 2050 25.0528 0.1959 10.56%
L 2055 11.9801 0.1171 -
L 2060 11.9802 0.1171 -
L 2065 11.9803 0.1171 -
G Fund 16.4968 0.0004 0.89%
F Fund 21.0938 -0.073 7.35%
C Fund 54.4504 0.6078 13.93%
S Fund 69.6009 0.4102 22.95%
I Fund 34.1572 0.3378 3.37%
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.