How to Become a TSP Millionaire: What 200,000 Federal Employees Did Right

Last Updated: January 27, 2026 Reading Time: 12 min

There are now 194,722 TSP millionaires as of January 2026. That's 37,000 new millionaires in just one year. But here's the reality check: TSP millionaires represent only 2.37% of all participants. What separates them from the other 97.63%?

It's not luck. It's not a secret fund. It's a combination of time, consistency, and avoiding the mistakes that derail most federal employees. Let me show you exactly what TSP millionaires do differently, and how you can join them.

Key Takeaways

• 194,722 TSP millionaires as of January 1, 2026, representing 2.37% of all TSP participants
• The average TSP millionaire has been contributing for 28-29 years of consistent investing
• Stock funds (C, S, I) are essential: C Fund's 10-year return is 13.7% vs G Fund's 2.36%
• Starting at 25 and maxing out at 7% returns reaches $1M in ~21 years, $2.85M by age 62
• The G Fund trap is real: investors who stayed 100% in G Fund rarely become millionaires

2025 Performance Update

2025 was an exceptional year for TSP investors, and the results show in the millionaire count.

Record Millionaire Growth: TSP millionaires hit a record 194,722 as of January 1, 2026, up from 157,760 a year earlier. That's 37,000 new millionaires in a single year.

Average Account Growth: The average FERS account grew by $23,300 in 2025 (from $194,000 to $217,300). CSRS participants saw similar gains, averaging $20,700 in growth.

Historic I Fund Performance: The I Fund returned 32.45% in 2025, its highest annual return ever, beating the previous record of 30.04% (2009). A falling U.S. dollar and undervalued international stocks drove the exceptional performance.

TSP Total Assets: The Thrift Savings Plan closed 2025 at $1.073 trillion, up $109.8 billion from year-end 2024.

Millionaires in Waiting: There are now 136,594 accounts in the $750K-$999K range. With continued contributions and market growth, many of these "millionaires in waiting" will cross the threshold in the next 2-3 years.

The 2025 results reinforce what TSP millionaires have long known: consistent contributions to stock funds, especially during good years, build wealth faster than playing it safe in the G Fund.

The 194,722 Club: Current TSP Millionaire Statistics

The number of TSP millionaires has exploded since the pandemic. Here's the growth trajectory:

Date	TSP Millionaires	Notes
March 2020	27,212	COVID market bottom
December 2024	157,760	Year-end
March 2025	146,910	Market volatility dip
June 2025	171,023	TSP hits $1 trillion
October 2025	189,836	+18,800 in one quarter
January 2026	194,722	Record high

That's a 615% increase from the 2020 bottom. The stock market recovery combined with consistent contributions created a wave of new millionaires.

But context matters: there are 7.28 million TSP participants. The 194,722 millionaires represent just 2.37%. Most federal employees will retire with far less, not because they couldn't have done it, but because they made avoidable mistakes along the way.

The Pipeline to Millionaire Status

Below the millionaires, there's a significant pipeline building:

Account Size	Number of Accounts
$750K - $999K	136,594
$500K - $750K	267,000
$250K - $500K	617,000

Over 136,000 federal employees are within striking distance. With continued contributions and market growth, many will cross the million-dollar threshold in the next 2-3 years.

How Long Does It Take? The Math by Age Group

Let's run the numbers. Assuming you max out TSP at $24,500/year with a 7% average annual return:

If You Start at Age 25

Years	Age	Balance
10	35	$358,000
20	45	$1.06 million
25	50	$1.60 million
37	62	$2.85 million

Time to $1M: Approximately 21 years

This is the power of compound interest. Someone starting at 25 and retiring at 62 could have nearly $3 million, all from their own contributions plus growth.

If You Start at Age 35

Years	Age	Balance
10	45	$358,000
20	55	$1.06 million
27	62	$1.42 million

Time to $1M: Approximately 23 years

Still achievable, but you're leaving significant money on the table compared to starting 10 years earlier.

If You Start at Age 40

Without catch-up contributions: You likely won't hit $1M by typical retirement age.

With catch-up contributions ($32,500/year after 50):

Years	Age	Balance
10	50	$358,000
15	55	$678,000
22	62	$1.05 million
25	65	$1.25 million

Bottom line: Starting at 40 requires maximizing contributions and using every catch-up dollar available. It's still possible, but the margin for error is much smaller.

If You Only Contribute 5% (Match Only)

Assuming $100,000 salary, 5% contribution ($5,000/year) plus 5% match ($5,000), total $10,000/year:

Starting Age	Balance at 62
25	$1.16 million
30	$804,000
35	$548,000
40	$364,000

The 5% match gets you to millionaire status only if you start in your mid-20s. Everyone else needs to contribute significantly more.

2026 TSP Contribution Limits

The IRS raised limits for 2026. Here's what you can contribute:

Category	2026 Limit	Per Pay Period (26)
Under age 50	$24,500	$943
Age 50-59 or 64+	$32,500	$1,250
Ages 60-63 (super catch-up)	$35,750	$1,375

SECURE 2.0 Roth Requirement: If you earned over $145,000 in FICA wages last year, your catch-up contributions must go to Roth TSP (not Traditional). This affects many GS-13s and above.

Don't Front-Load: If you max out early in the year, you stop receiving agency matching for remaining pay periods. Spread contributions evenly across all 26 pay periods.

The 6 Habits of TSP Millionaires

1. They Maximize the Government Match (At Minimum)

FERS employees get free money: 1% automatic plus up to 4% matching. Contribute at least 5% to capture all of it.

Your Contribution	Total Going Into TSP
0%	1% (automatic only)
3%	6%
5%	10%
10%+	15%+

Not contributing at least 5%? You're leaving thousands per year on the table.

2. They Invest in Stock Funds

This is the biggest differentiator. TSP millionaires invest primarily in C, S, and I funds:

Fund	10-Year Avg Return
C Fund (S&P 500)	13.7%
S Fund (Small/Mid Cap)	~12%
I Fund (International)	Varies (32% in 2025)
G Fund (Government)	2.36%

At 2.36%, the G Fund would require 35-40+ years of maximum contributions to reach $1 million. Most people don't have that timeline.

The typical TSP millionaire allocation: Heavy in C Fund and S Fund, with some I Fund for diversification. Limited or no G Fund until close to retirement.

3. They Start Early

Every year you delay costs you significantly:

• $10,000 invested at age 25 at 7% = $149,745 at age 65
• $10,000 invested at age 45 at 7% = $38,697 at age 65

That's a $111,000 difference from delaying just $10,000 for 20 years. Multiply that across your entire career and the gap becomes massive.

4. They Increase Contributions with Every Raise

TSP millionaires don't keep contributions flat. They increase their percentage with every promotion, within-grade increase, and annual raise.

Got a 3% raise? Put 2% of it into TSP. You'll barely notice the difference in your paycheck, but it compounds dramatically over time.

5. They Never Panic-Sell

Missing the market's best 30 days over the past 30 years would have cut returns by 83%. Many of those best days occur during bear markets, right after the worst days.

2008 Example: Federal employees who panic-sold at the market bottom and moved to G Fund locked in their losses permanently. Those who held steady saw full recovery and eventually became millionaires.

2020 Example: The market dropped 34% in March 2020. By year-end, it had fully recovered. Those who switched to G Fund at the bottom missed the rebound.

6. They Avoid TSP Loans

TSP loans seem convenient, but they derail millionaire status:

• Money you borrow isn't invested (missed growth)
• If you leave federal service, you must repay within 90 days or face taxes + 10% penalty
• Creates a pattern of repeat borrowing
• Often leads to reduced contributions

The data is clear: TSP millionaires rarely take loans. They find other ways to handle short-term cash needs.

6 Mistakes That Derail TSP Millionaire Status

Mistake 1: The G Fund Trap

The G Fund never loses money. That sounds safe. But at 2.36% average return, it barely keeps pace with inflation and will never build real wealth.

The math: At 2.36% returns, reaching $1 million would require contributing $24,500/year for 31 years, with no interruptions. At 7% (stock funds), it takes only 21 years.

Many employees moved to 100% G Fund after 2008 or 2020 and never switched back. They locked in safety, but also locked in mediocrity.

Mistake 2: Panic-Selling During Downturns

When markets drop 20-30%, the instinct is to "protect what you have." But selling low and buying back high is the exact opposite of successful investing.

TSP millionaires stayed invested through 2008, 2020, and every other downturn. They continued contributing when prices were low, which actually accelerated their path to millionaire status.

Mistake 3: Not Contributing Enough

Only contributing 5% (match only) is not enough unless you start very young. The math shows you need 10-15%+ contributions to have a realistic shot at $1 million by typical retirement age.

Mistake 4: Starting Too Late Without Catching Up

If you start at 45 with standard contributions, $1 million is nearly impossible at reasonable return assumptions. You must use catch-up contributions aggressively.

Ages 60-63 now have a "super catch-up" of $35,750/year. If you're in this window, use every dollar.

Mistake 5: Taking TSP Loans

Beyond the opportunity cost, TSP loans create behavioral issues. Employees who take one loan tend to take more. Each loan interrupts compound growth during what might be your highest-earning years.

Mistake 6: Early Withdrawals

The 10% penalty plus income tax is brutal. Beyond the immediate cost, you're permanently reducing your retirement balance and losing years of compound growth on that money.

If you absolutely must access retirement funds early, the 72(t) rule or Rule of 55 (if separating) can provide penalty-free access. But the best strategy is to avoid early withdrawals entirely.

Calculate Your Path to TSP Millionaire Status

Ready to see your numbers? Use our free TSP Calculator to model:

• Your projected balance at retirement based on current contributions
• How much you need to contribute to reach $1 million
• The impact of different return scenarios (conservative, moderate, aggressive)
• Monthly retirement income using the 4% rule or RMD method

Try the TSP Calculator →

What If You're Behind?

Not everyone can start at 25 or max out contributions. Here's a realistic action plan by age:

Age 25-35: The Foundation Years

Goal: Build the habit, maximize matching, go heavy on stocks

1. Contribute at least 5% to get full match
2. Target 10-15% as you advance in career
3. Invest 80-100% in stock funds (C/S/I)
4. Don't touch it, don't take loans

Age 35-45: The Acceleration Years

Goal: Ramp up contributions, stay aggressive

1. Push toward maximum contribution ($24,500)
2. Increase with every raise
3. Maintain 70-80% stock fund allocation
4. Start thinking about catch-up strategy

Age 45-50: The Catch-Up Prep Years

Goal: Maximize contributions, prepare for catch-up

1. Hit the $24,500 limit if possible
2. Build emergency fund outside TSP (so you won't need loans)
3. Consider 60-70% stock allocation
4. Plan to use full catch-up starting at 50

Age 50-59: The Catch-Up Years

Goal: Use every catch-up dollar

1. Contribute $32,500 (full limit + catch-up)
2. This is $1,250 per pay period
3. Maintain 50-60% stock allocation
4. Don't shift entirely to G Fund yet

Age 60-63: The Super Catch-Up Window

Goal: Maximize the unique opportunity

1. Contribute $35,750 (including super catch-up)
2. This is $1,375 per pay period
3. Consider 40-50% stock allocation
4. Only 4 years with this enhanced limit, use them all

Frequently Asked Questions

How many TSP millionaires are there in 2026?

As of January 1, 2026, there are 194,722 TSP millionaires, a record high representing a 37,000 increase from the previous year. TSP millionaires represent 2.37% of all TSP participants.

How long does it take to become a TSP millionaire?

The average TSP millionaire has been contributing for 28-29 years. However, if you max out contributions at 7% returns, you could reach $1 million in about 21-23 years starting in your 20s.

What is the best fund allocation to become a TSP millionaire?

TSP millionaires typically invest heavily in stock funds (C, S, and I Funds) rather than the conservative G Fund. The C Fund has a 13.7% 10-year average return compared to G Fund's 2.36%.

Can I become a TSP millionaire if I start at age 40?

It's challenging but possible. Starting at age 40 and maxing out contributions ($24,500 plus catch-up after 50) at 7% returns could yield approximately $1.25 million by age 65. You must maximize contributions and use catch-up contributions.

What percentage of federal employees are TSP millionaires?

Only 2.37% of TSP participants (194,722 out of 7.28 million) have reached millionaire status.

What is the largest TSP account balance?

The largest TSP account balance is $9.96 million as of January 2026.

Should I put all my TSP in the G Fund near retirement?

No. The G Fund rarely keeps pace with inflation (2.36% 10-year return). Most advisors recommend maintaining some stock fund exposure even in retirement to combat inflation over a 30-year retirement. A common approach is 40-50% stocks even in early retirement.

Related Resources

• TSP Calculator: Project your TSP growth and withdrawal income
• TSP Guide 2026: Complete guide to TSP funds, limits, and strategies
• TSP 72(t) Rule: Access TSP before 55 without penalty
• FERS Retirement Calculator: Combine TSP with your pension estimate

Sources

• FedSmith: TSP Millionaires Hit New Record
• FedWeek: TSP Millionaire Count Nears 200,000
• TSP.gov: 2026 Contribution Limits
• Federal News Network: TSP millionaires on the rise