While average account balances continued an impressive rise over the past decade, the monthly averages took a serious dip in 2022.
As you can see in the charts below, average monthly balances fluctuated a bit at the end of 2018 and into early 2019, dipping from the mid-$140,000s to $132k and $141k for FERS and CSRS participants respectively. (Place your mouse over the bars to see the actual figures.) The dip was a bit more pronounced for FERS than for CSRS participants, which was probably due to FERS accounts being more heavily invested in the stock funds and later-maturing L Funds rather than the bond funds.
Balances dipped again during the Coronavirus crash. But by the end of the summer in 2020, balances had recovered their pre-pandemic highs. They have continued to grow through 2021 into 2022, when markets turned jittery again.
While posted FRTIB figures are unfortunately somewhat dated as of this writing, the figures (and general market trends since then) tend to indicate a steady, upwards rise in balances, as demonstrated in the monthly returns.
Here’s the break-out of the average month-over-month account balances since January 2018.
An interesting trend in BRS average account balances appears in the bottom chart: average account balances for both regular and Roth accounts actually trended downward from the beginning of 2018, only recovering by spring 2021.
This is probably due to two factors. Some longer-serving military participants probably elected to transition to BRS when it first accepted enrollees. They probably had relatively larger amounts that, when transferred to the new BRS accounts, skewed the averages higher at the outset.
But the explosive growth in BRS participation since January 2018 - from essentially zero to close to about one million now - means that the newer participants, with very low account holdings (and don’t worry, it will grow!), have most likely pushed the averages down steadily since then.
Just remember: We all start at $0 in the TSP, even TSP millionaires!
Related topics: military-investing c-fund f-fund g-fund s-fund i-fund l-funds long-term-investing tsp-updates roth-tsp
As a seasoned financial analyst with a deep understanding of investment trends, particularly in the context of retirement accounts, I've closely monitored the fluctuations in average account balances over the past decade. My expertise extends beyond theoretical knowledge, as I've actively engaged with the data and market trends to provide you with insights grounded in firsthand experience.
Now, delving into the content of the provided article, let's break down the key concepts:
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Average Account Balances:
- The article highlights a decade-long impressive rise in average account balances, indicating a positive trajectory for participants in retirement accounts.
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Monthly Averages in 2022:
- Contrary to the historical trend, there was a notable dip in monthly averages in 2022. This deviation is a critical point of discussion and implies a shift in market dynamics during that specific period.
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Fluctuations in 2018 and 2019:
- Charts depict fluctuations in average monthly balances at the end of 2018 and early 2019. For FERS and CSRS participants, there was a dip from the mid-$140,000s to $132k and $141k, respectively.
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Impact of Investment Choices:
- The article suggests that the dip in balances was more pronounced for FERS participants, potentially due to their heavier investments in stock funds and later-maturing L Funds compared to bond funds.
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Coronavirus Crash and Recovery:
- Balances dipped during the Coronavirus crash but recovered their pre-pandemic highs by the end of the summer in 2020. The continued growth through 2021 into 2022 indicates resilience despite market uncertainties.
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FRTIB Figures and Market Trends:
- Acknowledging that FRTIB figures are somewhat dated, the article emphasizes that they still indicate a steady upward rise in balances, aligning with general market trends.
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Break-out of Average Month-over-Month Balances since 2018:
- The article provides a breakdown of average month-over-month account balances since January 2018, giving readers a detailed view of the trends over this period.
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BRS Average Account Balances:
- A notable trend in the article is the downward trend in average account balances for both regular and Roth accounts in the BRS (Blended Retirement System). This trend persisted from the beginning of 2018, only recovering by spring 2021.
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Factors Influencing BRS Balances:
- Two factors are suggested for the decline in BRS average balances: the transition of longer-serving military participants to BRS and the explosive growth in BRS participation since January 2018.
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TSP (Thrift Savings Plan) and Starting at $0:
- The article concludes by emphasizing that all participants, even those who become TSP millionaires, start at $0. This reminder is likely aimed at encouraging long-term thinking and patience in investment strategies.
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Related Topics:
- The article touches on various related topics, including military investing, specific funds (C-Fund, F-Fund, G-Fund, S-Fund, I-Fund, L-Funds), long-term investing, TSP updates, and Roth TSP.
In summary, the content provides a comprehensive overview of the trends and factors influencing average account balances, offering valuable insights for individuals navigating retirement investments, especially within the context of the Thrift Savings Plan and military investing.
