Your TSP account: By the numbers
Friday - 4/3/2015, 2:30am ET
The Thrift Savings Plan, Uncle Sam's in-house 401k plan, is definitely on a roll.
In February, the value of the TSP jumped past $450 billion for the first time. That was up from an asset value of $436,788 in January and $439,670 in December 2014.
The TSP is growing for a variety of reasons. In addition to the upward movement of two of the three stock market funds, more people are participating. While most federal retirees left under the old Civil Service Retirement System, a majority of current, still-working people are under the Federal Employees Retirement System. For CSRS workers, with their inflation- indexed defined benefit plan, the TSP, is a very nice feature.
For FERS employees — who will receive smaller annuities — the rest of their post-retirement income will come from Social Security and investments and earnings from their TSP accounts. As of February, 88.1 percent of all FERS employees were contributing something to the TSP.
The average TSP balance for FERS employees as of February was $117,584, just slightly ahead of CSRS workers whose average balance was $116,963. While that is interesting, averages only tell so much.
Tim C, a reader from the IRS, points out that "while statistically the averages are close, I am willing to bet the standard deviations are quite different." He cited figures from 2013, which he said showed there were nearly 2.4 million; FERS participants compared to only 146,000 CSRS accounts. The number of FERS employees, many new and at lower pay levels, continues to grow while the number of CSRS employees shrinks everyday due to death, retirement or job turnover.
He also pointed out that because of the 5 percent government match available to FERS investors, those who have been in the TSP since it started (in the mid-1980s) "should have approximately double the value of their accounts" compared to CSRS employees, because of the 5 percent government match.
TSP numbers interest a lot of people. For good reason. If you are above average, that's great. If not, it can serve as an incentive to get with the program. The TSP is a critical part of the total FERS retirement package.
The point is if you are investing, good for you. If not, why not?
Posted by: sarah_oz@yahoo.com
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