TSP Millionaire Ranks Shrink with Poor Q1 Stock Performance

Fidelity 401(k) Millionaire

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The number of millionaires in the federal government’s Thrift Savings Plan (TSP) dropped by 11% to 100,364 at the end of the first quarter of 2022, no doubt thanks to the poor performance of the stock market in the first three months of the year.

FedSmith reported the drop, noting there were 112,880 “TSP Millionaires”—current, former and/or retired feds with at least one million dollars saved in the world’s largest defined contribution plan—at the end of 2021. The average TSP millionaire had more than 28 years of contributions to the program as of March 31, 2022.

There were 99,399 TSP participants with between $750,000-$999,999 in their accounts as of March 31, 2022, with an average of 25.53 years of contributions. Another 211,747 participants had between $500,000-$749,999, contributing for an average of 23.35 years. As is to be expected, the biggest number of TSP participants (3,826,835) have less than $50,000 saved, and have been contributing for an average of only 5.8 years.

The poor quarter—the worst since the infamous COVID-19 lockdown in Q1 2020—also likely impacted the TSP’s largest retirement account holder in a big way, although the person’s identity is obviously not publicly disclosed. FedSmith noted that the largest amount in a TSP account at the end of December 2021 was $10,975,527. The largest TSP investor as of March 31, 2022 was just $8,400,765.23, which is $2,574,762 less than was in the largest TSP account just three months ago. The decrease is roughly the amount that the TSP’s C Fund dropped in value over the past quarter.

G Fund only gainer in Q1

It was indeed a rough quarter for the TSP’s various core funds, with only the ultra-conservative G Fund (government securities) showing a positive return—a minimal 0.44%.

The (common stock) C Fund, which over the past 10 years has had an average annual return of 14.65% and returned an astonishing 28.68% in 2021, was down 4.59% in the first quarter.

The S Fund (small- and mid-size businesses) was the biggest loser of the quarter, showing a 9.24% loss after ending 2021 up 12.45% (average annual return over the past 10 years: 12.42%).

The I Fund (International) fell 6.77% in Q1 2022, after finishing 2021 with an 11.45% gain. The F Fund (fixed income bonds) dropped 5.79% in Q1. It was the only core TSP fund to show a loss in 2021 (-1.46%).

For comparison, the S&P 500 dropped 4.6% in Q1 and the NASDAQ 8.9%. Ten-year U.S. Treasuries notes fell 5.5% in the quarter.

A quick look at the TSP’s various lifecycle fund performance in Q1 2022:

• L Income Fund: -1.30%

• L 2025: -2.54%

• L 2030: -3.65%

• L 2035: -4.08%

• L 2040: -4.49%

• L 2045: -4.86%

• L 2050: -5.19%

• L 2055: -5.93%

• L 2060: -5.93%

• L2065: -5.94%

SEE ALSO:

• Trump’s 2020 Block Means No TSP Funds Invested in Russia

• 100,000 Milestone Passed for TSP Millionaire Club

• TSP Fund Performance 2021: C Fund Leads Way

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