The number of TSP account holders with assets above $1 million grew by about half in 2020, from 49,620 at the start of the year to 75,420 at its end, the TSP has reported.
That increase came despite the early-year declines in stock markets that had reduced that number to 27,212 as of the end of March. As the stock markets rose, so did the number of TSP millionaires, nearly tripling from that low point. The largest account balance was $8.8 million, compared to the highest account of $7.4 million at year-end 2019.
The TSP noted that the figures include “rollovers from other qualified plans” such as 401(k) plans of previous employers.
The latest quarterly report from the TSP showed, as did prior ones, that the average time of investment in the TSP for the millionaires was about 29 years.
There was growth, although not as broad, in the numbers of those with accounts between $750,000 and $1 million, from about 75,000 to about 89,000 over that time, and for those with between $500,000 and $750,000, from about 177,000 to about 198,000. They have been investing nearly as long, about 26 and 24 years, respectively.
As of year-end 2020, the number of account holders—counting federal and military personnel and separated persons—was just below 6 million.
Turbulent Start for TSP as Valuations Remain High
Due to how fragile the middle class is, and due to the pandemic, the government is now running deficits and debts as a percentage of GDP at a level not seen since the 1940s.
The G Fund is Underperforming Inflation
If TSP investors leave money in the G Fund, it is guaranteed not to lose money nominally, but slowly chips away at purchasing power at current rates. On the other hand, if they invest heavily in the equity funds, they have more upside exposure, but also a lot more volatility risk.