Millionaires Club Fed

The number of federal workers with seven-figure Thrift Savings Plan accounts increased dramatically last year thanks to the booming stock market. In August 2017, there were 16,475 active and retired feds who’s TSP account balances exceeded $1 million. By Dec. 31, 2017, there were 23,962 TSP millionaires. Probably a lot more by the end of this month.

The largest account balance during the same 2017 time period went from $5.8 million to $6.2 million. Not too shabby.

With the exception of a few political appointees and members of Congress who over the years have brought outside retirement accounts with them when they joined the government, almost all of the TSP millionaires are ordinary civil servants who, at most, are capped at $161,900 with most making less, a lot less, than that. They got into the millionaires club by investing over a long period of time (average 28 years), by investing in the stock-indexed C (large cap) and S (small cap) funds of the TSP. Unlike most TSP investors, feds with big bucks accounts did not flee the stock market during the Great Recession of 2008-9 for what they considered the “safety” of the G-fund made up of low-yielding government bonds. For that extended period from the bottom of the recession to the recovery they continued to buy C and S shares which were, in fact, on sale. When the market started its dramatic recovery the value of those shares skyrocketed.

In mid-2017, there were 46,088 participants with accounts valued between $750,000 and $999,999. By the end of the year, that number had grown to 54,735.

In mid -2017, there were 2.6 million federal, military and retiree participants with accounts of $50,000 or less. On average they had been investing for 6.8 years. There were 1.4 million with accounts worth $50,000 to $249,000 and 436,509 with accounts of $250,000 to $499,000. There were 135,789 with between half a million and $749,000 and 46,088 with accounts worth between $750,000 and $999,000. People on the brink of being TSP millionaires.

By the end of 2017, there were 2.8 million people with $50,000 or less; 1.4 million with between $50,000 and $240,000 and 453,353 in the $250,000 to $499,000 range. Another 148,271 reached the half million to $749,000 TSP account value level and 54,735 had accounts worth between $750,000 and $999,000. The million-plus club had grown from 16,475 in August to 23,962 by the end of the year.

Nearly Useless Factoid

By Michael O’Connell

While there are 25 major species of coffee beans, only three are cultivated for commercial coffee consumption: Coffea arabica, Coffea canephora and Coffea liberica Bull.

Source: Quora