The TSP’s Millionaires: An Example for Us All
In December 2013, the government announced that the TSP’s millionaires had reached an all-time high of over 1,600. That may not seem too impressive when you consider that there are currently over 2.7 million Federal Employees, but no one goes into government service thinking they are going to be the next dot.com billionaire at a promising new company, with wages paid in stock options instead of cash. In fact, only a handful of government employees (two being the President and Vice President) make north of $200,000 a year. So yes, this is a big deal.
The Few and The Proud
These 1,600 plus that make up the TSP’s millionaires club are the few and the proud. Being able to save and invest so much on a government salary is not an easy feat, but they’ve proved that it’s possible. So why don’t we see more TSP millionaires, and why are there millions of Federal Employees with TSP account balances below $50,000? Granted, many of these people will have their basic annuity and social security to rely on as well, but will that be enough?
It’s too bad that we can’t put a microscope on these elite 1,600 and learn how they became the TSP’s millionaires. With only five TSP funds to choose from, it’s usually not a matter of developing a complex investment strategy to get rich. The truth is, most Federal Employees are not operating like Wall Street investment analysts.
If you looked closely at these people, you’d probably find that they’ve simply made contributions at or near the maximum each year and developed a prudent allocation within the five funds. No matter what your salary is, successful retirement preparation is about setting priorities, forming a strategy, and staying focused.
Learn more about your options with our FREE GUIDE: 7 Steps To Getting a Grip On Your TSP