TSP Millionaires’ Account Balances Infected by Coronavirus

April 3, 2020 10:34 AM , Updated April 16, 2020 11:06 AM
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In January 2020, FedSmith published an article entitled Surging Number of Federal Employee Millionaires. At that time, there were 49,620 millionaires in the Thrift Savings Plan (TSP).

With what amounts to a mandated economic depression now in effect in America, it is not surprising that the stock market has dropped dramatically.

Millions of people are filing for unemployment as companies are closing down (some temporarily, some probably closing permanently), cable news is spouting the latest projections for the number of people who will die 24 hours a day, and millions of people are sitting at home watching TV and probably getting depressed watching the news, and people are not rushing out to buy stocks in anticipation of a big move up in stock prices.

Latest Number of TSP Millionaires

The number of millionaires in the TSP dropped from 49,620 in December 2019 to 27,212 as of March 31st. This is a decrease of more than 45%.

The person with the largest TSP balance had $7,395,476.29 on December 31st. On March 31st, the largest account balance was $6,375,795—a decrease in value of almost 14%. We do not know if the person with the highest value TSP in December is the same person with the highest value TSP in March 2019.

Changing Number of TSP Millionaires

To put this in perspective, in January 2012 there were just over 200 TSP millionaires. A dramatic increase in stock market prices raised that number to 512 in March 2013 and zoomed up to 4,617 in February 2015.

Early in 2016, FedSmith reported a dramatic drop in the number of millionaires with a reported number of 3,272—a 21.5% decline from one year to the next but still a much smaller number that we have seen in the last several years.

The recent loss in the value of TSP accounts is easy to understand. In March, the C Fund dropped 12.4% and it is down 19.65% for the year-to-date.

The S Fund has had a more dramatic loss: 21.40% in March and 28.14% for the year-to-date.

The only TSP funds that are up so far in 2020 and the G Fund (up 0.4%) and the F Fund (up 3.10%).

Despite the drop in the number of millionaires in 2015, the number of millionaires increased dramatically as the bull market in stocks continued for a number of years.

While the latest numbers are discouraging, past history indicates we will again see an increase in this number when the bear market ends and stocks again increase in value. No one knows, of course, when that will occur. But, for those who aspire to become one among this fortunate number of TSP investors, canceling your stock investments during the current downturn in the economy will not raise your TSP investments to the magic million number.

For an analysis of what it takes to become a TSP millionaire, check out this article detailing what it takes to get to this level.

© 2020 Ralph R. Smith. All rights reserved. This article may not be reproduced without express written consent from Ralph R. Smith.

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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

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