Self-made millionaires club shows growth spurt

The number of self-made members of the TSP’s millionaires club jumped again last month. The number of active and retired feds with million-dollar-plus balances was 112,880 as of December 31, 2021.

Source: Federal Retirement Thrift Investment Board

That’s up from a then-record 98,523 at the end of September, 2020 and 84,808 at the end of March 2021 due to a “correction” in the long-running bull market that was so brief, many investors didn’t notice it.

The largest end-of-year balance in Uncle Sam’s version of a 401k plan jumped to $10.9 million dollars!

When the TSP was set up all of the big accounts were owned by wealthy political appointees, successful lawyers-turned-federal-judges and others who brought big retirement nest eggs with them. For a while, Club Mil was really exclusively composed of people who were rich when they came into government. But over the years, tens of thousands of ordinary federal and postal workers built up their accounts via long-range investing. Virtually all put all or most of their contributions in the TSPs stock-indexed funds which rise and fall with the markets. But over the long haul, obviously, rise. Typical investors have been in the TSP for about 30 years and most stayed with the C, S and I stock-indexed funds during the jolting, but as it turns out relatively brief, period we call the Great Recession of 2018-19. Most also continued to buy shares when the market correction had reduced their price by 40 to 60%. When the market started back in March 2009 it went on a record upswing marked by a few corrections many didn’t notice. Or pay attention too. At least so far.

A growing number of the TSP millionaires are retirees. I talked with (or heard from) three people in the last week who retired earlier this month. All had account balances in excess of $3 million.

What’s ahead? Obviously nobody knows. The market could tank tomorrow and, if past is prologue, it will sooner or later. The question is what do you do when it does? So far nothing — as in doing nothing but staying the course — has worked for a lot of people.

While nobody can tell where things are going, where we (and the TSP) have been is pretty clear.

The real news here isn’t the growing number of millionaires. The news is how many people have $250 to $900 thousand in their accounts, many with years to go and invest.

Nearly Useless Factoid

By David Thornton

In the town of Wasau, Wisconsin, a law established in 1884 made it illegal to throw snowballs. The law was finally changed in 2020.

Source: Wasau Daily Herald

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THRIFT SAVINGS PLAN TICKER

Jan 27, 2022 Close Change YTD*
L Income 22.9818 -0.035 5.42%
L 2025 11.7674 -0.0348 9.75%
L 2030 41.1981 -0.1745 12.37%
L 2035 12.3367 -0.0576 13.43%
L 2040 46.5517 -0.2384 14.51%
L 2045 12.7166 -0.0702 15.40%
L 2050 27.7906 -0.1647 16.34%
L 2055 13.5733 -0.1009 19.90%
L 2060 13.5730 -0.1009 19.90%
L 2065 13.5729 -0.1009 19.90%
G Fund 16.7560 0.0007 1.38%
F Fund 20.4420 0.0524 -1.46%
C Fund 65.3584 -0.3496 28.68%
S Fund 70.5987 -1.2451 12.45%
I Fund 37.2227 -0.2427 11.45%
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.