For decades, many people have set a benchmark of a cool one million dollars as their retirement savings goal. Whether or not that amount will continue to provide enough income for retirement is another matter for another day… But to this day, the allure of becoming a millionaire persists. And quite a few TSP members have reached that goal!
In fact, the number of TSP millionaires has increased by more than 150 percent in the past year, thanks to a healthy stock market. As of December 2016, 9,599 TSP members had accumulated one million dollars or more. In December of 2017, that number had risen to 23,962!* This is quite a shocking difference over the 208 TSP millionaires back in January of 2012.
Of course, we should keep in mind that the number of millionaires within the TSP system is a relatively low percentage. Only 0.48 percent have accumulated assets worth one million or more within their plans. But still, we’re excited about this news.
How did it happen? By the one-year anniversary of the 2016 election, the Dow Jones industrial average posted its biggest post-election gains in 70 years. The DJIA increased by more than 28 percent in one year.
But of course, a healthy stock market is only one piece of the puzzle. We all know that higher risk often equals higher potential for rewards. Meanwhile, choosing safe investment options can provide security, but do little to grow assets by such impressive proportions. It is likely most of these TSP millionaires were willing to take some risks, and right now they are feeling handsomely rewarded. But there is no guarantee of market conditions lasting, so we hope everyone is carefully managing their respective risk tolerances.
On that note, give us a call to discuss your Thrift Savings Plan. We can help you analyze your own risk tolerance, and balance your need for security with your desire for growth.
*Stats from Office of External Affairs for the Federal Retirement Thrift Investment Board (FRTIB)
