How to Be a TSP Millionaire

The rising stock market has increased the number of federal employees who have balances of $1 million or more. Some of our users have said it is not possible to achieve this milestone, but one of our readers says it most definitely is and shared her strategy with us.

Think becoming a millionaire just by investing in the Thrift Savings Plan is impossible? One of our readers proved otherwise and shared her strategy with us as to how she was able to achieve this important milestone.

I’ve been a millionaire for a little over a year, and (not surprisingly) I like it.

I check my TSP balance monthly (and rebalance the fund ratios). Today I checked and was delighted to see that I’ve set a new high – $1,192,314. This was a gain of $121, 617 over the account balance on 12/30/2013.

I wondered how many other TSP millionaires there are, and found your article. I was pleased to see that I am apparently in the top .02% of government savers. (See Number of TSP Millionaires up 195%)

For those that say it can’t be done, I can tell you how I did it. When the TSP started in April, 1987, I put in the maximum, 10% of my GS11 salary. Initially, it was in the G fund, but two years later I switched to the C fund. I always had the maximum deduction, and all my money in stocks until I was over 40, when I started moving some money to the G fund. I also started contributing the maximum “catch-up” money when I turned 50.

Over the years, I have taken out four loans, totaling $99, 242. Most recently, I borrowed $25,000 last May to pay off some bills and do some repairs.

Looking back on my balances at various times, I can still remember the thrill of reaching $100k (10/31/97), then $250k (a quarter million! sometime in 2003). I hit half a million 4/9/2007 and the thrilling ONE MILLION DOLLARS! 10/15/2013.

A good friend, the same age I am, said she “couldn’t afford” to put much into the TSP. Even with her more modest salary (she was just recently promoted to a GS12, whereas I’ve been a GS14 for 8 years) and her long time 5% contribution, she has almost $500,000.

I plan to work at least another 5 years and hope that I may hit the $2m mark before I go.

The government and a slow but steady plan has been very good for me.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47