Thrift Savings Plan

What’s the average thrift savings plan balance?

Learn what the average thrift savings plan is, and how much you should have saved in your TSP at each age.

3 min read

A thrift savings plan has become a popular retirement plan for federal service employees to save for retirement. Eligible federal employees can contribute part of their paycheck over time up to the annual TSP contribution limit, and still receive an agency match. 

The average thrift savings plan balance for FERS participants was $156,702 as of October 2022, while the average TSP balance for CSRS participants was $174,679 in the same period. This was a decline from the average balance of $181,279 for FERS participants at the end of 2021 and $196,424 for CSRS participants in the same period.

How many TSP millionaires are there?

The number of TSP millionaires as of December 2022 was 76, 889, a 17.4% increase from the 65,484 millionaires as of September 2022, but still a 42% decline from the 112,880 TSP millionaires reported as of December 2021.

The reason for the drop in the number of TSP millionaires was the declining value of TSP stock funds. As of December 2022, the S Fund and C Fund had dropped in value by 26% and 18.13% respectively during the year. Cumulatively, the value of TSP assets declined from $811 billion as of December 2021 to $748 billion as of December 2022. This is despite the number of TSP participants increasing from 6.5 million in 2021 to 6.7 million in 2022.

On average, TSP participants who joined the millionaires club have been contributing to the retirement plan for about 29.58 years as of December 2022, while the average years of contributions for all TSP participants was 10.68 years in the same period.

Average TSP balances

The average TSP balance has grown steadily in the last decade, reaching the six-figure mark in 2013. As of 2021, the average TSP balance for FERS participants was $181,279, while the average TSP balance for CSRS participants was $194,424.

As of October 2022, there was a decline in the average TSP balances for both FERS and CSRS participants. The TSP balances for FERS participants dropped to $156,702, while the TSP balances for CSRS participants dropped to $174,679.

The average TSP balances for Roth TSP plans also declined in the period between December 2021 and October 2022. As of December 2022, the average Roth TSP balance for FERS participants was $21,302, down from $22,942 in December 2021, while the average Roth TSP balance for CSRS participants was $29,075 in October 2022, down from $31,667 in December 2021.

How much can you contribute to TSP?

If you are enrolled in FERS or CSRS retirement, you may be eligible to contribute to a TSP plan. The IRS determines the amount you can contribute to the retirement plan each year. For 2023, you can contribute up to $22,500 for elective deferrals, up from $20,500 in 2022. To max out your TSP contributions, you will need to contribute $1,875 every month from your paycheck.

If you are age 50 or older, you are eligible to make catch-up contributions to the TSP plan. The 2023 annual limit for catch-up contributions is $7,500, meaning that you can contribute up to a combined total of $30,000. If you are eligible for catch-up contributions, any excess contributions beyond the $22,500 limit are automatically rolled over toward the catch-up contribution limit.  

TSP participants may also receive matching contributions from their agency. Participants receive an automatic 1% contribution, followed by a dollar-for-dollar match for the first 3% of employee contributions, and an additional 0.5% match for the next 2% of employee contributions. Therefore, if you contribute at least 5% of your basic pay, your agency will contribute at least 4% of your basic pay. 

For 2023, the combined employer and employee TSP contributions should not exceed $66,000. If you are 50 or older, the combined contributions should not exceed $73,500.

How Much Should I Have Saved in My TSP?

According to Fidelity, you should save 10x your pre-retirement income by age 67 to have enough money to maintain your current lifestyle. Fidelity recommends age-based milestones between ages 30 to 67.

Based on these guidelines, you should aim to save 1x your income by age 30, 3x by age 40, 6x by 50, 8x by 60, and 10x by age 67. However, these milestones may vary depending on the age when you plan to retire and the desired lifestyle in retirement.

For example, if your salary is $50,000 per year, you should target to save $50,000 by age 30, $150,000 by age 40, $300,000 by age 50, $400,000 by age 60, and $500,000 by age 67. If you have not saved $500,000 by age 67, and you have other sources of retirement income like state pension and Social Security, you may still be able to maintain your current lifestyle.

Is TSP better than 401(k)?

TSP was modeled on the 401(k), and both retirement plans share several similarities. However, there are several features that make TSP better than 401(k).

While TSP does not have as many investment options as a 401(k), it has lower fees. TSP participants pay a total expense ratio of 0.066%, which includes administrative and investment fees, while the expense ratio for 401(k) plans may range from 0.88% to 1.19%. This means that for every $1,000 in TSP balance, you will pay about $0.66 per year.

TSP provides a higher employer match than a 401(k) plan. TSP offers a 1% automatic employer contribution, and a match of up to 4% of your basic pay, for a total of 5% employer match. In comparison, most 401(k) plans offer a 50% match on up to 6% of the employee’s basic pay.

Also, TSP participants enjoy greater flexibility when accessing their retirement money than 401(k) participants. TSP participants can choose to receive installment payments of fixed dollar amounts over a period, make single withdrawals, or convert their balance into an annuity that guarantees payment for their lifetime. They can also roll over their balance into an IRA. On the other hand, 401(k) participants can choose to make periodic distributions over time, take a lump sum distribution, or roll over the money to an IRA.