4 Effective Ways Service Members Can Use the TSP F Fund (2024)

FAQs

How does the TSP F fund work? ›

How can I use the F Fund in my TSP? In periods of falling interest rates, the F Fund will experience gains from the resulting rise in bond prices. So in the long run, you may expect F Fund returns to exceed those of the G Fund; however, you should also expect greater price volatility (up and down movements).

Save a Percentage Instead of a Dollar Amount

If you feel daunted by your TSP plan, consider contributing the same percentage of your check per pay period, instead of a specific dollar amount. This way, if your compensation increases, the amount you contribute will increase at the same rate as well.

Is the F Fund a good investment? It's a good investment if your investing goals are in alignment with the objective of the F Fund, which is for diversification, lower risk than the G Fund, and capital preservation. But it still has risks just like any investment.

Roth TSP: With the introduction of Roth TSP, Soldiers have the potential for two types of balances in the TSP account: TSP and Roth TSP. The Soldier's own contributions can be designated as traditional TSP or Roth TSP. Roth contributions are taken out of the paycheck after income is taxed.

The Aggressive Funds

The C, S, and I funds are the more aggressive of the funds in the TSP. The reason they are called “aggressive” is because they have a much higher chance of sustaining major growth over time. But because of this, they can also be much more volatile than the G and F funds.

The TSP's F-fund is passively managed and tracks the Barclays US Aggregate Bond Market Index, which is made up of a broad range of fixed-income investments from the total US bond market. The index contains roughly 7000 individual bonds with an average duration of 5.1 years and an average yield of around 4.1%.

To receive the maximum Agency or Service Matching Contributions, you must contribute 5% of your basic pay each pay period.

Avoid using trisodium phosphate on metal surfaces, particularly aluminum. The solution can darken and corrode metals, leaving them looking dull and pitted. Avoid using TSP on hardwoods like oak and maple, because TSP will darken wood after cleaning with it.

In order to attain this, Fidelity suggests you focus on achieving certain benchmarks. At 30, you should have half of your annual salary saved. By 40, you should have twice your salary, and by 50, you should aim for about four times your salary in retirement savings.

Fixed Income Index Investment Fund

The objective of the F Fund is to match the performance of the Barclays Capital U.S. Aggregate Bond Index, a broad index representing the U.S. bond market. The F Fund invests in a bond index fund that tracks the Barclays Capital U.S. Aggregate Bond Index.

What happens to F fund when interest rates rise? ›

Generally, if market interest rates rise, the value of your F Fund shares will fall, and vice versa. The effect of rising interest rates is offset, to some extent, by the interest payments that are periodically received from the bonds and credited to the shares' value.

In a nutshell, Ramsey advises federal employees to invest at least 5% in a Roth TSP, then invest the rest in a Roth IRA. He also recommends investing in a handful of TSP funds -- funds C,S, and I -- with a higher percent in the C Fund (at least 60 to 80%).

Eligible rollover distributions of your traditional balance may be rolled over to a traditional IRA, an eligible employer plan, or a Roth IRA. taxed in the current year, and no income tax will be withheld. You won't be taxed on this money until you withdraw it from the traditional IRA or the eligible employer plan.

Most Military Members Don't Get Matching TSP Contributions

It's not that military members can't get them, it's that you probably don't. The secretary of each branch of the armed forces is authorized to allow matching contributions for servicemembers in critical specialties.

Your TSP is a Military Thrift Savings Plan, and it's very similar to a civilian's 401(k). You don't have to pay any taxes on your TSP as you're investing, so it's a much better option than some other investment plans. A TSP is offered not only to military members but also to all other federal employees.

By this measure, the I Fund is the riskiest, with a maximum drawdown of -60.89%, which occurred during the 2008-2009 global financial crisis. (An investor who'd bought the fund at its peak in 2007 would have experienced a 60.89% loss by March 2009).

TSP contributions and investing should be top of mind when you begin your federal career. An employee who earns 50,000 per year and contributes 2,500 dollars with a 2,500-dollar match from the government can reach the TSP millionaire dollar mark in 25-30 years by investing aggressively.

This is due to default concerns and investors demanding a higher interest rate on riskier corporate bonds. In other words, even in a falling interest rate environment the TSP F fund can lose out to other pure Treasury funds or the TSP G fund because of a flight-to-safety risk during financial stress.

Thrift Savings Plan F Fund Monthly Returns is at 0.60%, compared to 2.55% last month and -3.75% last year. This is higher than the long term average of 0.45%.

Its yield to maturity hovers around 3.9%, and the average coupon is 2.6%. The average maturity is 8.9 years, and the average duration is 6.7 years.

What is the TSP F fund performance in 2023? ›

The fixed income bonds in the F fund, however, lost 1.1% in May. That fund's 2023 performance remained in the black, at 2.62%. The international stocks of the I Fund dropped 4.01% last month.

The G fund is often described as the safest of the TSP investment funds. Sometimes it is called the “super safe” G fund that “never has a bad day.” It invests in short-term, non-marketable U.S. Treasury securities guaranteed by the federal government.

Your catch-up contributions will be in addition to the 2023 TSP regular contribution limit, which means employees can contribute up to $30,000 in 2023. To maximize the catch-up contribution amount of $7,500 for 2023, employees will need to contribute an additional $288 per pay period ($7,500/26 = $288.46).

If you're under age 50, you and your employer can contribute $66,000 total to your TSP, 401k or other tax-advantaged retirement account. If you're at least 50 years old, the total 2023 contribution limit is $73,500. Here's a breakdown of the 2023 Thrift Savings Plan contribution limits.

However, if your bathtub has some tough stains, follow the following steps: Mix a teaspoon of trisodium phosphate cleaner (TSP) with hot water. Apply the solution on the stain with gentle rubbing using a sponge and rinse well.

TSP is excellent for cleaning and removing heavy deposits of grease, grime, smoke, soot stains and chalked paint from walls, woodwork and floors. TSP when mixed with bleach can be used to remove mold and mildew stains.

Tri- sodium phosphate (TSP) eats away the built-up dirt on the deck while oxalic acid brings out the grain and original brightness and color of the wood. The best part is these chemicals are safe for treated lumber or to prep for re-staining or coating your deck or patio.

The rule essentially states that you can withdraw 4% annually from a well-diversified retirement portfolio, adjust your 4% every year for inflation, and expect your money to last for at least 30 years.

If you retire with $500k in assets, the 4% rule says that you should be able to withdraw $20,000 per year for a 30-year (or longer) retirement. So, if you retire at 60, the money should ideally last through age 90. If 4% sounds too low to you, remember that you'll take an income that increases with inflation.

Your best bet is to stick with the C, S and I Funds. Here's the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the S&P 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.

Which TSP fund is best for 2023? ›

TSP Performance Up in March and Year-to-Date in 2023

This is the index on which the C Fund is based. The C Fund is up 7.49% so far in 2023. The Fund with the best return so far this year is the I Fund which is up 8.63%. Some investors will note that the I Fund is near the bottom in popularity among TSP investors.

The fixed-income (F) fund's earnings come from changes in market prices as well as interest. Neither of those funds have any dividends.

Employees wishing to reach the maximum regular contribution limit for 2023, in equal installments, should elect to contribute $866 per pay period starting in pay period 26, 2022.

The 2023 TSP contribution limit for employee deferrals is $22,500, a nearly 10% increase from the $20,500 limit in 2022. The IRS caps catch-up contributions at $7,500 in 2023, a $1,000 increase over the last three years. You can only make catch-up contributions if you're at least 50 years old.

The G Fund is invested in short-term U.S. Treasury securities specially issued to the TSP. Payment of principal and interest is guaranteed by the U.S. government. Thus, there is no “credit risk.”

However, the L Income Fund is the most conservative of the L Funds. It focuses on money preservation while providing a small exposure to the riskier funds (C, S, and I Funds) in order to reduce inflation's effect on your purchasing power.

Thrift Savings Plan F Fund Monthly Returns (I:TSPFFMR)

Thrift Savings Plan F Fund Monthly Returns is at 0.60%, compared to 2.55% last month and -3.75% last year. This is higher than the long term average of 0.45%.

It varies with the stock market, but about 1% of Thrift Savings Plans have more than a million dollars in them. Most so-called TSP millionaires have been working for decades.