Dallen Haws

With stocks on track for the biggest weekly losses since 2008 – the TSP included, it might seem counterintuitive to consider how one could become a TSP millionaire, but that’s also the point.

One of the key strategies to building up a TSP balance over 1 million dollars (which can be done even without having rolled in a large balance from an IRA or 401k) is to avoid the temptation to time the market.


One of the worst things any investor can do is to buy high and sell low, something many federal employees did during the Great Recession as the market bottomed out – guaranteeing to lock in losses and miss out on buying cheap. Since that time, returns have been great, with the C and S funds up over 250% in that time.

Becoming a TSP millionaire is simple. But as we all know, simple doesn’t always mean easy. As of the end of 2019, there were nearly 50,000 federal employees with at least $1,000,000 in their TSP. Some of those folks transferred a large percentage of their funds from previous 401(k) plans – but not all, and most of those TSP millionaires have accounts going back nearly 30 years.

The good news for the rest of us is that the majority of these millionaires built their wealth the old fashion way. One paycheck contribution at a time (dollar cost averaging). Here are 3 things that TSP millionaires understand and do.

Invest Consistently

In investing, consistency trumps all. Actually, in just about every area of life, consistency trumps all. Anything that we do on a regular basis becomes a habit, and habits shape who we are and what our life looks like.

For example, let’s take brushing your teeth. It is most effective when we brush our teeth for just a couple of minutes every day. It would not work if we decided we’d only brush our teeth for 2 hours once a quarter. The same applies for exercise, nutrition, relationships, and yes, investing.

But here is some good news: once you get it set up, it is easy to consistently invest in your TSP because it automatically comes out of your pay. The hardest part is often simply setting it up. You can take the initiative and start investing into your TSP today. If you are already investing, can you start contributing more every pay period? Not everyone can afford to, but if you can, here’s another adage to keep in mind: What you don’t see, you won’t miss.


Just like a snowball, your TSP will be small at first but with years of compounding, you will be surprised how large your TSP can grow.

LifeCycle funds are still slightly up over the past year, at least for now, but abandoning one of them for the G Fund, for example, would lock in losses and prevent you from benefiting from a rebound – whenever that unfolds.

The Match

TSP millionaires understand the power of the TSP match. For those that don’t know, the government offers a 5% match when you contribute 5% of your salary to the TSP. For example, if you make 100k and you contribute $5,000 to the TSP, the government will put an additional $5,000 in your account. $5,000 of free money!

In investing, earning a 10 percent return is considered pretty good. Because of the match, you receive an automatic 100% return on your first 5 percent of your salary!

The match is so good that sometimes it makes sense to prioritize this match over paying off debt. (Obviously in a perfect world, we’d want to invest and pay off debt). Even on credit cards, interest rates are only about 25% which is tiny compared to the 100% match. The best strategy would be to contribute 5% to get the match, pay off debt with what is left, and invest more with anything that remains.

Once Again: Do Not Try To Time The Market


The last 10 years have been an incredible stock market run. It is officially the longest bull run in stock market history. Ask anyone that has invested in the market during this time and their eyes might light up.

Most people, especially those that were young in 2008, don’t even remember what a recession feels like or who got hurt, who didn’t recover. But as we know, market corrections are just another part of the economic cycle and nobody truly knows when the next recession will hit and how long it will last.

Now, I am sure you can find 1,000 websites willing to prognosticate. Just keep in mind, some of these “authorities” have been claiming that the stock market couldn’t go any higher for the last 7 years. If someone would have listened to this advice 7 years ago, he or she could have missed the opportunity to double returns.

Most institutional investors that try to time the market simply can not do it – and a lot of the financial industry is supported by commissions on trades and other fees, not returns on sage advice.

Those that manage to beat the market, don’t beat it by very much and can’t do it consistently. (Legendary investor Warren Buffet won a famous bet against a hedge fund by betting that its hand picked portfolio of hedge funds – after fees – couldn’t beat the gains of the S&P over a 10 year period. The S&P, which the C Fund tracks, did the best, and so Buffet won the bet.)

When it comes to the market, the best strategy is riding it out with a diversified strategy that keeps your emotions out of the decision making process, and with an investment mix that fits your age and risk tolerance.

Once more: the worst thing you can do as an investor is buying high and selling low, so ride it out if you can. The second worst thing you can do as a TSP investor is not investing enough and taking advantage of the government’s 5 percent match which would be just leaving money on the table – so if you can afford it, make sure to get the full match.

TSP: Global ‘Risk Off’ Trade Accelerates, For Now

G Fund No Longer Keeping Up with Inflation

Understanding Inflation and the Thrift Savings Plan

Dallen Haws is a Financial Advisor who is dedicated to helping Federal Employees live their best lives. He loves talking about the security and freedom that a strong financial plan can bring to our lives. He has seen how good information can change everything.  You can learn more about him at https://planyourfederalbenefits.com/.

TSP Investors Handbook, New 7th Edition