If the number of people with more than a million dollars in their Thrift Savings Plan accounts is any measure, people have good reason to be crabby.
At the end of December 2021, the federal and retired workforce included 112,880 so-called TSP millionaires. By the end of September 2022, they numbered only 65,494, down by half. Now the millionaires’ population has partially recovered, to 77,889.
These numbers, while interesting, don’t show a complete picture, and it’s easy to draw the wrong conclusions. Yes, funds are down across the board in the last year. So people in the million dollar category drop to the $799K-$999K category, and so on.
It’s also true that the federal population is changing. The people with $50,000 or less in their TSP numbered 3.7 million at the end of 2021. At the end of 2022, 4.2 million. The average number of years they had been contributing grew only slightly, to roughly six years. That suggests an ongoing stream of people joining the government and starting TSP accounts. Programs launched by extraordinary spending bills resulted in a year of hiring. Veterans Affairs and Homeland Security, for instance, have both steadily added staff.
The average years of contributions by the “millionaires” grew by exactly a year, during the year. It went from 28 to 29 years. That suggests it’s wise to keep your contributions going through the ups and downs of stock cycles.
It’s fun to watch the millionaires’ club balloon and shrink, but it’s a rough number on which to craft any sort of strategy. By the way, the biggest single account last year held nearly $11 million. That’s down to $6.7 million now, no doubt a different person. If you inherited an $11 million IRA, you’d have to withdraw $1.1 million a year for 10 years. Alec Baldwin couldn’t live on that, but I could.
An ongoing TSP concern is that people can’t easily adjust the amounts of their monthly withdrawals. The TSP Board has promised that functionality, but there’s no deadline, and last I checked, no update.
My readers have called the TSP site unintelligible, unacceptable, a failure. One emailed an animated Reddit post, which had received many sympathetic comments. They are generally civil, something not guaranteed in such forums. You haven’t lived until you’ve been excoriated in a place like Reddit.
One respondent answered (to a couple of dozen thumbs up): “I know that this doesn’t address the root of the problem, but as a workaround could you forgo automatic monthly withdrawals and just manually withdraw what you need each month?” The answer seems to be yes, but it’s the kind of administrivia people would rather skip. Another commenter said he got around the TSP-generated withdrawal levels by talking with someone on the phone, who executed the change.
Another respondent gave the TSP Board the benefit of the doubt: “I think it is a recently introduced system error that they are trying to fix — not an intentional design change.” And to be fair to the TSP, its own statistics — which it distributes freely — show that in a given month, some 80% of participant interactions occur online, via web log-ins.
What’s your TSP experience lately? And how are you dealing? Email me with your thoughts.
Telework debate continues.
Recent columns and interviews about telework and the return-to-the-office debate keep drawing reactions. One federal executive commented on one of my LinkedIn posts. He’d led a $2.7 billion IT project “on time and on budget” with everyone, including the vendors, while teleworking.
He commented, “There are many people who aren’t interested in their work. They must be miserable. But they would be uninterested in their work and miserable regardless of location.” That’s true.
One seasoned fed wrote in an email, “The whole home office space thing is a boondoggle.” He reminded me of something I’d forgotten about the first federal forays in teleworking more than 30 years ago. “Back in the dark ages … our safety office had to inspect the home office before someone got telework approval.” That seemed understandable back in the day. Anything could be going on in a given household to make it unsuitable to work in. I still remember the time I went home after grade school with a friend to a squalid house. Today you’d call it a hoarder house. It shocked my young mind, growing up as I did in the home of a super-neatnik mom.
My correspondent continued, describing how he tried to use his first government-furnished notebook PC on a home desk designed for big, old desktop computers.
“The kitchen and dining room tables were too tall, and the chairs were designed for one hour dinner. The attic is unheated, and the basement does not have an internet signal. I bought a small office table, but the only chair that ‘fit’ was a folding wooden chair, from my wife’s grandparent’s farm. I gave up on that in less than a week.”
Another emailer, now retired from a large component of a large agency, said he worked from home for several years before retiring. “As I figured it, as long as the work got done in a timely fashion, there was no kick.” As for his manager, “I always told him to keep sending me work until I complained, which actually never happened.” This northern New England resident adds, “So if one day I was very lazy it was not such a big deal. I knew what I had to do and I did it.”