Publisher's Perspective

At many tree nurseries, you’ll see a sign that says something like: “When’s the best time to plant a tree? 20 years ago. When’s the second-best time? Today!”

Did you plant your retirement saving tree 20 years or more ago ago? Many federal employees did, actually. But if you missed the best chance, you always have the second-best chance.


One way to illustrate this is through reports from the Thrift Savings Plan, which issues statistics monthly on total account balances and quarterly on the numbers of investors with balances within certain ranges.

Of those, of course, the figures that attract the attention are the ones showing the number of TSP millionaires, which as of year-end 2020 stood at 75,420. Another nearly 200,000 had balances between $500,000 and $750,000 and yet another nearly 89,000 had between $750,000 and $1 million.

As with those house-shopping or home renovation shows on reality TV that make it look like everyone lives in a palace, such statistics can arouse a certain level of envy, or discouragement—why am I not living like that?

Something that may make you feel better: those 75,000 TSP investors account for only just above 1 percent of the nearly 6 million account holders. In federal employment terms, they truly are the 1 percenters.

And in some cases, a gaudy total may not reflect only investment in the TSP, but rather also money that was rolled into the TSP from a 401(k) of a prior employer. The largest account balance, for example, was $8.8 million. That sounds like someone who had bought stock in his own employer’s company when working there, stock that performed exceptionally well.

Another thing to note is the importance of time. In the top of those three categories, the average time in the TSP was nearly 29 years, in the next two down nearly 26 and 24. These are people who did plant their tree 20 years ago, and have fed and watered it with continued investments, year after year.

What can you do from today? One other thing that may make you feel better is to consider your starting point. The average account balance for a FERS investor was above $164,000 and for a CSRS investor—many of who likely are retired—about $10,000 more. If you’re in that neighborhood and still have a substantial number years left before retirement, that’s a good start.

You can invest $19,500 per year, plus another $6,500 in any year in which you are age 50 and above. If you are under FERS, your agency will kick in contributions of up to 5 percent of salary. If you are under CSRS, there are no agency contributions.


Possibly you can’t achieve maximum investments. TSP figures also show that investment levels tend to go up with higher salary levels, age and years of federal service, which tend to increase together. But can you invest just a little more than you are investing today, and keep increasing it?

It would be worth your while to spend some time looking at the impact of different investment levels for different periods; there are many such online calculators available, although you may prefer the one on because it takes into account to FERS matching contribution formula.

The one thing you don’t want to do, if you can at all avoid it, is be among the still nearly one-tenth of federal employees who do not personally invest in the TSP at all. Those who are under FERS still get an automatic 1 percent of salary agency contribution, true, but what they basically will have in 20 years is a hole in the ground.

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FERS Retirement Bundle: 2021 FERS Guide & TSP Handbook