The current stock market is the result of an unexpected coronavirus outbreak on the global economy. The worst ones to suffer from this impact are 22,432 active and retired federal employees seeing their Thrift Savings Plan account shrinking day by day and taking them out of the Millionaire’s Club. More than 5 million investors having comparatively smaller retirement nest eggs are seeing their account shrinking less or, in some cases, even increasing a little.
The poor people seeing their TSP account balance dropping from $7.4 million as of December 31, 2019, to $6.37 million as of March 31, 2020, are people impacted by the pandemic the most.
Walter D., from Arlington, Virginia, said in his statement that this TSP balance table shows that a higher percentage of TSP millionaires lost money than non-millionaires. Now the question is, does this balance drop related to millionaire accounts holding a higher rate of stocks than non-millionaire ones? The historical data has taught us that the percentage of shares held per account has decreased with age, but this picture does not support the size of the TSP balance.
We have reports from another TSP millionaire whose account balanced dropped. He was still able to stay in the club and believes that an individual with more significant accounts prefers investing in stocks to make long-term investments in the stock market in C, S, and I funds.
He further added, unfortunately, the above table doesn’t give any data for this analysis. We have 4-5 million federal employees out there, not because of their capacity to bear the risk. Some employees never moved their money out of the Treasury G fund during their career span and their retirement for safety reasons. They like to invest more in mutual funds with their IRAs account, but such investors are only a few because most of them aren’t investing beyond their TSP balance and residence. We see more federal employees with their second homes or investment properties. The TSP millionaires are the ones who believe in investing in the C and S funds and will continue to invest some part of their income during their careers and in retirement also.
