Record Number of TSP Investors Are Feeling Like a Million Bucks (2024)

FAQs

Record Number of TSP Investors Are Feeling Like a Million Bucks? ›

Record Number of TSP Investors Are Feeling Like a Million Bucks. As of year-end 2023 just under 117,000 TSP investors had $1 million or more in their accounts, an increase of some 40,000 during the year, another impact of the rebound in stock-based investment funds during the year making up for their losses of 2022.

The largest TSP account balance is now $8,007,210. This is up from $7,226,814.30 at the end of September and from $7,170,226.61 at the end of March. The average years of contributions to the TSP among the $1 million and up account balances is 28.91 years.

Total TSP assets at the end of 2023 were $845 billion. 4,060,009 FERS TSP accounts with an average account balance of $175,692. To compare, the average 401(k) balance based on 4.9 million defined contribution retirement plans was $112,572 at the end of 2022, according to Vanguard's 2023 analysis.

Be patient: Building wealth takes time and becoming a millionaire through the TSP will likely require a long-term perspective. Stay the course and continue saving and investing consistently, and you will increase your chances of reaching millionaire status.

In addition to making regular TSP contributions, you may also make TSP Catch-up contributions, if you are age 50 or older (or will be turning age 50 in 2024). The 2024 IRS annual limit for Catch-up contributions is $7,500. This amount is in addition to the regular TSP limit of $23,000.

There's a one-word answer to that question: More! There is no such thing as too much money in the Thrift Savings Plan. If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire.

In fact, statistically, around 10% of retirees have $1 million or more in savings. The majority of retirees, however, have far less saved.

Fidelity also reported that the number of 401(k) accounts with balances of at least $1 million rose in the fourth quarter by 20%, to 422,000 accounts; and by 41% for the whole year.

Let's say you want to become a millionaire in five years. If you're starting from scratch, online millionaire calculators (which return a variety of results given the same inputs) estimate that you'll need to save anywhere from $13,000 to $15,500 a month and invest it wisely enough to earn an average of 10% a year.

The Rule of 55 allows workers who leave their job during or after the year they turn 55 to avoid paying the 10% early withdrawal penalty on their retirement account distributions. It doesn't matter why you are leaving, but you must be at least 55 years old in the calendar year you are leaving your job.

How much should I have in my TSP by age 50? ›

By age 35, aim to save one to one-and-a-half times your current salary for retirement. By age 50, that goal is three-and-a-half to six times your salary.

Many participants choose to keep their money in the TSP because of the TSP's low-cost funds. And you can always move money into your TSP account by making rollovers from eligible employer plans and from traditional IRAs. You always control how your money in the TSP is invested, even if you aren't making contributions.

Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.

The figure — representing about 2 percent of account holders — tops the previous high in the quarterly reporting of about 113,000 at year-end 2021; the year-end figure for 2022 had been about 77,000.

If you work for more than one employer in the same calendar year, it's possible to contribute too much and exceed the IRS limits. If you over contribute, you may request a refund of the excess amount from the TSP. For a limited in January each year, we make the Refund Request Form available.

As of year-end 2023 just under 117,000 TSP investors had $1 million or more in their accounts, an increase of some 40,000 during the year, another impact of the rebound in stock-based investment funds during the year making up for their losses of 2022.

The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds.

If you reach the annual maximum too quickly, you could lose some Agency/Service Matching Contributions because you only receive Agency/Service Matching Contributions on the first 5% of your basic pay that you contribute each pay period.

2024 Contribution Limits

The Internal Revenue Service has announced the Thrift Savings Plan (TSP) elective deferral limit for 2024 will increase to $23,000 per year.