What Is the Average TSP Balance at Retirement?

The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and uniformed service members. Operating similarly to a 401(k), it allows participants to save for their future through tax-deferred or Roth contributions. This article explores average TSP balances at retirement, providing insights into what these figures represent and how they can help participants contextualize their savings progress.

Understanding TSP Balance Data

The term “average TSP balance” typically refers to the mean balance across all participant accounts, or for specific demographic groups. As of December 31, 2024, the average balance for Federal Employees Retirement System (FERS) participants was approximately $194,131, while the median balance was considerably lower at $61,817. This difference highlights how a small number of very high balances can skew the mean, making the median a more representative figure for typical participants. For Civil Service Retirement System (CSRS) account holders, the average balance stood above $220,000 at the end of 2024.

Average balances also vary significantly across different age groups, reflecting career progression and years of saving. For instance, participants aged 35-44 generally hold balances around $91,281, increasing to approximately $168,646 for those aged 45-54. Individuals in the 55-64 age bracket typically have an average of about $244,750, and for those 65 and older, the average balance reaches around $272,588. These figures are derived from official TSP reports and various financial surveys.

While these averages provide a useful benchmark, they have limitations. They do not account for individual circumstances such as varying income levels, career lengths, or personal financial goals. The data also includes active employees and retirees, which can affect the overall average reported for a specific age group. Therefore, these averages should be viewed as general indicators rather than definitive targets for personal retirement savings.

Key Determinants of TSP Balances

Several factors influence the accumulation of funds within a TSP account. Contribution levels are a primary determinant, encompassing both employee and agency contributions. In 2024, participants could contribute up to $23,000, with an increase to $23,500 in 2025, to their traditional or Roth TSP accounts. For those aged 50 and older, an additional catch-up contribution of $7,500 was permitted in 2024, allowing for a total of $30,500. Federal agencies also contribute to participant accounts through an automatic 1% contribution of basic pay. Agencies provide matching contributions for FERS participants, matching the first 3% of an employee’s contribution dollar-for-dollar and the next 2% at 50 cents on the dollar. By contributing at least 5% of their basic pay, employees can receive a total agency contribution equal to 5% of their pay (1% automatic plus 4% matching). Maximizing these agency contributions is a key strategy for growing a TSP balance, as failing to contribute at least 5% results in forfeited matching funds. It is important to avoid reaching the annual contribution limit too early in the year, especially for FERS participants, as this can halt matching contributions for subsequent pay periods.

Investment choices and market performance also play a substantial role in account growth. The TSP offers a selection of funds:
The G Fund (Government Securities Investment Fund) is stable and provides a non-negative return.
The F Fund (Fixed Income Index Investment Fund) invests in government and corporate bonds.
The C Fund (Common Stock Index Investment Fund) tracks the S&P 500.
The S Fund (Small Capitalization Stock Index Investment Fund) invests in smaller U.S. companies.
The I Fund (International Stock Index Investment Fund) provides exposure to international stocks.
Lifecycle (L) Funds offer diversified portfolios tailored to specific target retirement dates, automatically adjusting their risk exposure over time.

While the stock-based funds (C, S, I) exhibit more volatility, they also offer greater potential for long-term growth. The length of an individual’s career and years of service significantly impact the power of compounding returns within a TSP account. The longer funds remain invested, the more time they have to grow and generate additional earnings, even from modest contributions. Many participants who achieve substantial balances have contributed consistently for 25-30 years. Conversely, any withdrawals made from a TSP account during employment, such as through general-purpose or residential loans, can reduce the overall balance and diminish the compounding effect.

Relating Averages to Individual Retirement Goals

Average TSP balances serve as a statistical reference point, rather than a universal target for personal retirement savings. An individual’s specific retirement goals and financial circumstances should dictate their savings strategy, as these needs vary widely among participants. Factors such as desired retirement lifestyle, anticipated healthcare costs, and personal longevity projections significantly influence the amount of savings necessary.

Other sources of retirement income, such as a FERS pension and Social Security benefits, also contribute to an individual’s financial security in retirement. The TSP is designed as one of three pillars of retirement income for FERS participants, alongside these other benefits. Relying solely on an average TSP balance as a measure of preparedness might overlook a comprehensive financial picture. For example, some individuals may have substantial alternative savings or investments outside of the TSP that contribute to their retirement readiness.

A personalized financial plan considers unique variables like current income, projected expenses in retirement, and the desired standard of living. Focusing on these individualized elements allows participants to tailor their TSP contributions and investment choices to their own unique aspirations, rather than simply aiming for a statistical average.