As we reported earlier this week, the Thrift Savings Plan’s core stock funds provided strong returns in 2021, and that in turn has helped a record number participants in Uncle Sam’s version of the 401(k) top seven-figure account balances.The number of TSP millionaires has now topped six figures, with 112,880 active and retired feds having million-dollar-plus retirement account balances as of Dec. 31, 2021.
112,880 active and retired TSP participants had million-dollar-plus account balances as of Dec. 31, 2021
This marks the first time the six-figure barrier for the number of TSP millionaires has officially been crossed, up from 75,420 at the end of 2020, and up from 98,253 since the end of September 2020—an increase of 14.57% thanks in large part to stock market gains.
FedSmith notes that based on the latest data provided by the Federal Retirement Thrift Investment Board (FRTIB), 1.7% of all Thrift Savings Plan investors—numbering about 6.3 million—are now millionaires. They have participated in the TSP for an average of 28.2 years.
The largest single end-of-year balance in the largest defined contribution plan in the world totals a staggering $10.9 million, up from $8.8 million a year ago.
The number of TSP accounts with balances between $750,000 and $1 million rose over the year from about 89,000 to 105,000 (average participation 25 years); those between $500,000 and $750,000 from about 198,000 to about 220,000 (average participation 23 years); and those between $250,000 and $500,000 from about 513,000 to 538,000 (average participation 20 years).
It should be noted that the largest number of TSP investors—3,771,214—still fall in the “under $50,000” category, and have participated in the program for 5.72 years.
As FedWeek notes, in some cases the account balances reflect rollovers from retirement savings plans of prior employers and investment gains on them along with direct investments in the TSP and investment gains on them.
As the 100,000 TSP millionaires threshold has now been crossed, it’s interesting to look at how the seven-figure club has grown over the past decade.
When FedSmith first started reporting the number of TSP millionaires at the beginning of 2012, there were just 208 of them. By December of 2016, it was still only 9,599, but it jumped to 23,962 a year later. As recently as December 2019, there were fewer than 50,000 TSP millionaires.
While rollovers certainly have helped many TSP participants break the seven-figure account balance barrier, investing in the TSP’s C Fund (common stocks) has no doubt been a pathway for many. About one-third (32.4%) of TSP participants are invested in the C Fund, which returned an impressive 28.68% in 2021 to help many join the club.
SEE ALSO:
• TSP Fund Performance 2021: C Fund Leads Way
• TSP Millionaire Ranks Poised to Pass Milestone
• 3 Ways to Get TSP Participants to $1M