The number of TSP millionaires exploded over the past year thanks to the outstanding performance of the stock market in 2024.
According to figures from the Federal Retirement Thrift Investment Board (FRTIB), the agency that oversees the Thrift Savings Plan (TSP), the number of TSP millionaires was 116,827 at the end of 2023. At the end of 2022, there were 76,889 TSP millionaires.¹
The latest increase in the number of millionaires in the TSP is even more impressive: it’s up to 155,334 as of the end of September 2024.¹
So how can I become a TSP millionaire?
TSP contributions and investing should be top of mind when you begin your federal career in order to achieve big returns.
Two financial habits that can help you on your financial journey are: 1) to start saving early in your career, and 2) to conquer any fears you have about investing your money.
1. Start Saving Early
This may seem like a no-brainer, but obviously the longer you save, the more time you’ll have to accumulate earnings and build your account.
As you may have guessed, federal employees who have become TSP millionaires have been investing in the TSP a lot longer. The average number of years of contributions for those who have achieved millionaire status is 29.35 years.¹
If you didn’t start saving early in your career, it’s not too late to start. You even have a built-in tactic available to you: use pay raises (or step increases) to help beef up your savings.
As retirement nears, you’ll also want to make sure that you’re maximizing your TSP account contribution and decreasing your debt and spending. How much do you have in your TSP? Can you challenge yourself to contribute more? How can you max out the TSP at $23,500 per year? How can you get the full catch-up contribution of $7,500 per year (available in the year you turn 50) or $11,250 per year (ages 60-63)? Please note: these numbers are based on the 2025 TSP contribution limits.
Wherever you are today, how can you step up your game just a little bit and make that work within your budget? Even small increases to your savings and TSP contributions can add up to big savings over the long term.
2. Don’t Let Your Emotions Affect Your Investment Decisions
It’s important to consider how your emotions affect your investment decisions—specifically fear and greed. Fear that the market may fall can lead to panic and poor choices. A stretch of continued positive returns can lead to greed and excitement, leading to false thinking that the market will continue to go ever higher without a correction. Just remember that knee-jerk reactions—in a good or a bad market—rarely favor the investor.
Your TSP is a Long-Term Retirement Account
People invest in an account like the TSP (or a 401k or an IRA) because these are long-term retirement vehicles. There will be highs and lows, but you should think of these investments in the “long-term” and try not to panic when faced with a down market. As we’ve seen time and time again, the market will eventually correct itself. You’re playing the “long game” to grow your TSP account for retirement.
Learn How to Optimize Your TSP
Spend time learning about your TSP account to understand the risk, volatility, and options you have to choose from when saving for retirement. To learn more, be sure to check out this webinar replay on “Optimizing Your TSP.”
I would also recommend consulting with a financial professional who can help you make sound investment decisions and set goals for your retirement.
Whether or not it’s realistic for you to become a millionaire, I highly encourage you to optimize your TSP and maximize your savings for your financial future.
If you’re ready to get serious about planning for your retirement from federal service, register to attend a workshop today!
Source:
¹Federal Retirement Thrift Investment Board
*********************************
For an introduction to a financial professional in our network: FedImpact.com/request-to-meet
View all Articles: FedImpact.com/articles
Find a comprehensive retirement workshop for your area: FedImpact.com/attend
