Up next in 10
A record 224,420 federal employees and retirees now hold $1 million or more in their TSP accounts—but the story behind that number is more interesting than the headline.
In this video, we break down what happened to TSP millionaires in 2026: the dramatic Q1 dip, the stunning Q2 rebound, and what it all tells us about market-driven investing for the long haul.
If you're saving for federal retirement or curious about how the Thrift Savings Plan actually works, this one's for you.
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TSP Millionaires Hit New Record as Markets Rebound in Q2
https://www.fedsmith.com/2026/07/27/tsp-millionaires-hit-new-record-as-markets-rebound-in-q2/
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0:00
Hello everyone, Ian Smith here with
0:02
fitzsmith.com. Here to talk to you about
0:04
the TSP and more specifically the number
0:07
of TSP millionaires.
0:10
Um, if you're a current or former
0:12
federal employee, no doubt you're
0:14
familiar with the Thrift Savings Plan.
0:17
But what you may not know is just how
0:19
lucrative this important retirement
0:21
savings vehicle that you have at your
0:23
disposal can be, especially over the
0:26
course of a federal career.
0:28
I'm just going to go over some numbers
0:29
with you here.
0:31
And the important milestone here is that
0:34
the number of TSP millionaires has hit a
0:36
new record high.
0:38
As of July 1st of this year, a record
0:41
224,420
0:44
federal employees and retirees are now
0:46
sitting on a million dollars or more in
0:48
their TSP accounts.
0:50
That's a lot of millionaires in one
0:51
retirement plan.
0:53
But here's the thing though, this number
0:54
didn't just climb steadily. It actually
0:57
took a pretty dramatic detour earlier
0:59
this year. And understanding that story
1:02
tells you something important about how
1:04
the TSP works.
1:09
So let's rewind for a moment to March
1:11
2026, just a few months ago.
1:14
The TSP millionaire count at that time
1:17
had actually fallen to 184,532
1:22
at the end of the first quarter.
1:24
That was down from a previous record of
1:26
194,722 at the end of 2025.
1:31
That's because the stock market had a
1:32
rough first quarter.
1:35
The C and S funds both took a hit and
1:38
each was down close to 5% in the first
1:41
quarter. And when stocks dip, account
1:43
balances dip with them. In the first
1:45
quarter, there was more volatility like
1:48
the big thing at the time, the war in
1:50
Iran was just getting going and so that
1:52
drove markets down, stock prices down.
1:56
So all those people who were
1:57
millionaires in December now suddenly
1:59
had accounts that were smaller or less
2:02
valuable on paper at least.
2:04
Um and that's the thing about
2:05
market-based investing. Your balance
2:08
will fluctuate based on what the market
2:10
does on any given day.
2:13
But then Q2 happened, the markets
2:16
rebounded, and they rebounded sharply.
2:18
In just 3 months, April through June,
2:21
the number of TSP millionaires jumped by
2:23
21.6%.
2:26
That's 39,888
2:28
more people crossing the million-dollar
2:30
threshold in a single quarter.
2:33
It was the biggest quarterly jump in the
2:34
TSP's
2:36
uh millionaire counts, in fact, since
2:38
2020.
2:40
And it wasn't just concentrated in one
2:42
fund or or just the
2:44
the ultra-wealthy or the higher-value
2:46
accounts. The recovery was broad-based.
2:49
Let me show you what happened with the
2:50
individual funds.
2:53
On this slide, you can see where the
2:54
recovery actually came from.
2:57
The S fund, that's the small-cap stocks,
2:59
led the charge with nearly 20% uh
3:02
returns.
3:04
The C fund, which tracks the broad
3:06
market, came in at about 15%.
3:09
And the I fund, which is the
3:10
international funds,
3:12
was uh
3:14
almost 14 and 1/2%.
3:16
Even the bond funds had respectable
3:18
gains, although obviously nowhere near
3:20
in the the same ballpark.
3:23
The key point here is that all three
3:25
stock funds moved up together. And that
3:27
broad recovery across the board is why
3:29
we saw accounts jump across all the
3:32
different balance tiers, and not just
3:33
the really large accounts.
3:35
Consistent savers who had 500, 750,000
3:39
heading towards a million, they all got
3:41
boosted up by roughly the same
3:42
percentage. That's how you get nearly
3:45
40,000 millionaires in a quarter.
3:50
Now, here's something el- else
3:52
interesting that most people don't think
3:53
about. Total TSP assets hit $1.156
3:59
trillion
4:01
as of May 2026.
4:03
That's an all-time high.
4:05
But the money flowing in and out tells a
4:07
different story.
4:08
In the first 5 months of this year,
4:10
federal employees and retirees have
4:12
withdrawn and borrowed $33.98 billion.
4:17
Meanwhile, however, new contributions
4:19
and loan repayments came in at $22.4
4:22
billion. That's a net outflow of about
4:25
$11.58 billion. And by the way, this is
4:29
all based on data from the Federal
4:30
Retirement Thrift Investment Board,
4:32
which is the agency that oversees the
4:34
TSP.
4:36
So, in other words, more people are
4:37
taking money out of the TSP than are
4:40
putting money in.
4:41
And that's happening because of the
4:42
shrinking federal workforce. Most
4:45
likely, at least. And as I'm sure you're
4:47
aware, the federal workforce shrank
4:49
considerably over the last year.
4:51
So, there are fewer active employees
4:53
contributing paychecks to the plan and a
4:55
growing number of recent retirees are
4:58
drawing down their balances.
5:00
So, here's the reality. The record
5:02
number of TSP millionaires and record
5:04
total assets aren't being powered by new
5:07
money flowing into the plan. They're
5:09
being powered primarily by market
5:11
performance. And that's that second
5:13
quarter
5:14
uh run-up in stocks that I was showing
5:16
you on the previous slide. When the
5:18
markets go up, balances grow. When they
5:21
go down, balances shrink.
5:24
That simple.
5:27
And so, if you're watching this and
5:29
thinking, "I really want to be a TSP
5:31
millionaire, too." Here's the important
5:32
thing to remember. The average person
5:35
who has hit the million-dollar mark has
5:38
been contributing to the TSP for 27
5:40
years on average.
5:42
That's more than a quarter century. And
5:44
so, that's one full career for a lot of
5:47
federal employees.
5:49
It's not about timing the market or
5:50
making some brilliant move at just the
5:53
right time such as right before Q2 when
5:56
the market shot up.
5:57
It's impossible to time the market.
6:00
It's about consistency. Putting in
6:03
contributions month after month, year
6:05
after year whether the market's up or
6:06
down.
6:08
It's about letting compound growth do
6:10
the heavy lifting over time. Again,
6:12
timing the market right every single
6:15
time is nearly impossible to do.
6:18
If it wasn't
6:21
everybody would be a billionaire.
6:23
So, the volatility we saw in this year,
6:25
the dip in Q1, the rebound in Q2, that's
6:28
just noise if your timeline is measured
6:30
in decades. And that's really the
6:32
important thing. What matters is that
6:34
you stayed the course.
6:37
So, what's the real takeaway here?
6:39
The TSP just hit a record number of
6:41
millionaires, which is great for all
6:43
those federal employees and retirees who
6:45
made it there. But the bigger story is
6:47
that this record exists because the
6:48
markets rebounded after a tough quarter.
6:51
They came back even stronger than ever.
6:54
It's an important reminder that your
6:55
retirement savings are going to
6:56
fluctuate. Some quarters will be great,
6:59
some will be rough.
7:01
But if you're investing for a 20, 30,
7:03
40-year timeline
7:05
which most federal employees are over
7:07
the the course of a full federal career,
7:10
those quarterly swings are just part of
7:11
the ride.
7:13
The key is not to panic when when the
7:15
market dips and not to get overconfident
7:17
when things spike. Just keep
7:19
contributing, keep your allocation
7:20
diversified, and let time do the work.
7:24
That is how you become a TSP
7:25
millionaire. I hope you found the
7:27
information in this video helpful. I
7:30
appreciate you watching today. Um if
7:32
you'd like more information, I've
7:34
included a link in the description to an
7:36
article that goes into a lot more detail
7:38
on this topic as well. That's on the the
7:40
fedsmith.com website.
7:43
And you can check it out there as well
7:45
as our other articles on this and other
7:46
topics of interest to current and former
7:48
federal employees. And I hope you found
7:50
the information inspiring as well.
7:52
That's part of why we share this
7:53
information on the TSP millionaires is
7:56
to show, especially younger federal
7:58
employees, what's possible
8:01
with investing in the TSP over the
8:04
course of a entire federal career,
8:06
especially if you keep contributing on a
8:08
regular basis from each paycheck, and
8:11
picking up the the match that the
8:13
government gives you.
8:15
It it really can build up over time as
8:17
these numbers clearly indicate.
8:19
So, I hope you found this helpful, and
8:21
thank you for watching, and have a good
8:23
day.
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