If you have seen your TSP Balance decline in 2022, you are not alone. According to an August 2022 study of TSP participant balances, the number of “TSP Millionaires” is down 36% from the end of 2021 through August 2022. TSP Millionaires are employees or retirees whose TSP balances exceed $1 million.
Decades-high inflation, rising interest rates, and fears of a recession have led to falling Stock and Bond markets in 2022. As a result, almost all investors – including those who participate in the TSP – have seen their investments decline in value.
At the end of 2021 there were 112,880 TSP investors who were members of the TSP Millionaires club. That was a record high.
The spike in TSP Millionaires was a result of outstanding returns in the stock funds in the years leading up to 2022 and consistently investing in the stock funds over a long time period.
Now, with markets in decline, the number of TSP Millionaires has declined from 112,880 at the end of 2021 to 72,241 as of August 2022 – a 36% drop. The new number is the lowest number of millionaires since 2020 when there were 75,420 TSP Millionaires.
Although it is uncomfortable seeing your TSP accounts decline in value amid the uncertainty in the stock market and the economy, history suggests you should stay invested for the long term. Investors too frequently decide to sell stocks when they are near their low points and then buy back into the market too late or not at all.
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This is for educational purposes only. To learn more about the topics mentioned and if they are suitable for you, consult an appropriate professional. Tax laws can change at any time.
Any information provided in this presentation has been prepared from sources believed to be reliable, but is not guaranteed and is not a complete summary or statement of all available data necessary for making an investment decision. Any information provided is for information purposes only and does not constitute a recommendation.
Arthur Stein and Arthur Stein Financial, LLC are not authorized to give legal or tax advice. For information on your specific situation, please consult your tax advisor regarding any tax implications and your attorney for legal implications. As required by the US Treasury Regulations, you should be aware that this presentation is not intended to be used and it cannot be used for the purposes of avoiding penalties under federal tax laws.
Keep in mind that:
- Past performance is no guarantee of future performance;
- Investments involve the risk of loss of principal and earnings;
- ETFs, mutual funds, money market funds, etc. are not guaranteed by the US Government, the FDIC, a bank or anyone else.
- “Average annual return” evens out variations in the actual year-to-year returns.
- ETFs, mutual funds and individual stocks and bonds fluctuate in value and there will always be times when they lose value.
- None of the information provided is necessarily relevant to anyone’s personal situation. Circumstances differ among individuals and you should not assume that these generalizations or information apply to you.
- Investments mentioned may not be suitable for all investors.