Thrift Savings Plan spawns millionaires

By Tom Shoop

June 17, 2010

Officials who oversee the Thrift Savings Plan, the 401(k)-style investment plan for federal employees, always have encouraged employees to take the long view, putting away money throughout their careers to draw on when they retire.

As Government Executive's Retirement Planning columnist, Tammy Flanagan, noted a couple of weeks ago, every dime employees contribute to their TSP accounts belongs to them. Also, employees under the Federal Employees Retirement System receive matching contributions on the first 5 percent of salary that they contribute biweekly (dollar-for-dollar matching on the first 3 percent and 50 cents on the dollar for the rest).

Clearly, some employees are doing the math and realizing that long-term TSP investments can add up. Figures supplied by the Federal Retirement Thrift Investment Board, which oversees the TSP, show that 75 participants in the TSP currently have accounts valued at $1 million or more. And one savvy investor has at least $3 million socked away. All told, more than 10,000 participants have at least $500,000 in their accounts.

Account Value Number of Participants
$500,000 - $599,999 7,020
$600,000 - $699,999 2,121
$700,000 - $799,999 698
$800,000 - $899,999 205
$900,000 - $999,999 65
$1,000,000 - $1,999,999 69
$2,000,000 - $2,999,999 5
$3,000,000+ 1

Clarification: The original version of this story should have indicated that only employees under the Federal Employees Retirement System receive matching agency TSP contributions. The article has been updated to clarify this point.

By Tom Shoop

June 17, 2010

http://www.govexec.com/pay-benefits/2010/06/thrift-savings-plan-spawns-millionaires/31754/