In December 2013, the government announced that the Thrift Savings Plan (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.
However, 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 Thrift Savings Plan 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.
For over 30 years, federal employee retirement planning has been a key focus of Medallion Financial Group. We recognize that FERS retirement benefits have extra layers of complexity, such as the Thrift Savings Plan (TSP), 401K, Pension plan, FEGLI and more. It’s easy to get lost in a sea of bad advice when so few people understand the basics. We help with the basics and beyond to enable our clients to get the education and advice they need to retire with confidence.
Our focus is twofold: first and foremost, we are fiduciary advisors. We stand against any violation of laws, values, and ethics. Second, we treat our clients as part of our family, not only those who call Maryland and Georgia home, but clients across the US who have benefited from our reputation of personal service, integrity, and expertise.
We strive to exceed client’s expectations – because we have high expectations of ourselves.