171,000 Feds Just Hit $1M in Their TSP—What Do They Know That You Don’t?

July 17, 2025

According to new federal data, a record-breaking 171,000 TSP participants now hold balances of $1 million or more.

But the real question isn’t how they got there.

It’s what they’re doing now—in 2025—while most federal employees are still wondering if the Roth TSP is a trap, if they’re too heavy in the G Fund, or if they’re 10 years behind.

So, what’s the millionaire crowd actually doing differently?

Here’s a breakdown of the post-million milestone behavior—and how you can start applying it even if you’re decades away from seven figures.

1. They’re Not Reaching for Returns—They’re Protecting Time

Millionaire TSP participants didn’t chase meme stocks or pivot to crypto.

Their advantage? Time.

The average TSP millionaire has been contributing for 28+ years, through wars, crashes, and elections.

But now that they’ve crossed $1M, they’re optimizing differently:

  • Shifting out of full equity into strategic blends (not just “auto” lifecycle)

  • Using partial withdrawals to stage Roth conversions before RMD age

  • Evaluating withdrawal sequencing to avoid Medicare IRMAA penalties

2. They’re Still in the Market—but More Intentionally

Contrary to myth, these retirees aren’t camping in the G Fund. In fact, most stayed heavily in C, S, and I Funds over the years—and continue to maintain growth exposure with smarter safeguards.

Now? They’re starting to:

  • Build volatility buffers (like 2–3 years of expenses outside TSP)

  • Use age-based rebalancing, but not passively—based on needs, not norms

  • Model sequence of returns risk and simulate worst-case drawdowns

3. They View $1M as a Starting Line, Not a Finish Line

Hitting $1 million in your TSP is a milestone—but it's not the destination.

Some are now realizing the tax trap of RMDs, the FEHB cost curves, and the psychological freeze that comes from fearing a market dip at the wrong time.

The smartest among them are:

  • Using Roth TSP withdrawals strategically (not all or nothing)

  • Preparing for the 2026 tax sunset that could shrink retirement margins

  • Reassessing their legacy goals (for kids, spouses, or causes)

4. What You Can Steal From Their Playbook—Right Now

You don’t need $1 million to think like someone who has it.

Here’s a quick “Millionaire Prep Audit” for any federal employee or retiree:

  • Are you contributing at least 15% consistently, regardless of age?

  • Have you set a “volatility rule” for yourself (e.g. no reallocation during down quarters)?

  • Do you know the tax impact of each withdrawal type—before you touch it?

  • Do you have a glidepath plan to reduce risk—but not prematurely?

  • Have you stress-tested your plan for a 25% portfolio drop?

If not—now’s the time. Because building wealth is one game. Keeping it is another.

This isn’t about becoming a millionaire.

It’s about borrowing the best behaviors from those who already are—and adapting them to where you are right now.

—FWR