TSP C Fund (2024)

FAQs

Is C fund good for TSP? ›

How can I use the C Fund in my TSP? The C Fund can be useful in a portfolio that also contains stock funds that track other indexes such as the S Fund and the I Fund. By investing in all segments of the stock market (as opposed to just one), you reduce your exposure to market risk.

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.

Thrift Savings Plan C Fund Monthly Returns is at -5.78%, compared to 5.58% last month and 4.48% last year. This is lower than the long term average of 0.92%.

Big Opportunities Right Now

Because when the market is down, you are able to invest at a huge discount. Think about it. The C Fund has lost about 20% since January 2022 which means that you can buy significantly more shares in the C Fund with the same TSP contribution as before.

The Small Capitalization Stock Index (S) Fund

It offers you the opportunity to earn potentially higher investment returns over the long term than you would in the C Fund, but with greater volatility.

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.”

The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.

Average TSP account balances for FERS participants reached $20,821.00, while average balances for CSRS participants reached $29,388.00 as of May 2022.

For more conservative investors, note that the G Fund (often considered the safest TSP Fund) had a return of 1.38% for the year. The L Income Fund, which also includes some stock investments, had a much better return than the G Fund. The L Income return in 2021 was 5.42%.

What is the TSP for 2023? ›

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).

Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.

They know the ride during the year can be bumpy, but they understand that the TSP bounces back and continues to grow over time.

U.S. Treasury bonds are widely considered the safest investments on earth. Because the United States government has never defaulted on its debt, investors see U.S. Treasuries as highly secure investment vehicles.

By 40, you should have twice your salary, and by 50, you should aim for about four times your salary in retirement savings. The bottom line is that at 40, if $75,000 represents twice your salary, you're in good shape. If not, you may want to start playing catch-up.

If you want to avoid paying taxes on the taxable money in your TSP account for as long as possible, do not to take any distributions until the IRS requires you to do so. By law, you are required to take required minimum distributions (RMDs) beginning the year you turn 72.

Consider leaving your funds in the TSP unless you don't want to deal with extra paper work or you want more investment options. Otherwise, consider rolling your TSP account assets into your new 401(k) plan if you have one, or one of the other following options.

Are there TSP millionaires? ›

TSP recorded its greatest number of elite members in December 2021, with 112,880 millionaires.

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

If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire. This is based on something called the “4% rule”.

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.

Average return since inception (1988) is 10.43% . Tracks the Dow Jones U. S. Completion Total Stock Market Index.

TSP millionaires now comprise about 1.7% of all accounts, compared with about 3% last year.

When Steve hit the $1 million mark in October 2021, there were 98,523 TSP millionaires overall, but that includes all the federal workers in the TSP program, as well as military members. Those millionaires averaged 28 years of contributions.

The G Fund is now the biggest among the five core Thrift Saving Funds funds. The fund has more than $200 billion invested in it. That's a big deal, but what does that mean for TSP investors?

Further, you are exposed to inflation risk if your C Fund investment does not grow enough to offset inflation. While there is some volatility, the C Fund is very popular because there is tremendous opportunity for significant dividends as market prices shift.

Once you leave the uniformed services, you'll no longer be able to make contributions. However, you can still change your investment mix, transfer eligible money into your account, and enjoy our low costs—all while your account continues to accrue earnings.

Will federal employees get a raise in 2023? ›

Late last month, President Biden issued an executive order formalizing an average 4.6% pay increase for civilian federal workers in 2023. The raise is split between a 4.1% across-the-board increase in basic pay and a 0.5% boost to locality pay.

Staying with the TSP

If your vested account balance is $200 or more when you leave federal service, your TSP account stays right where it is until you need it. You can keep more of what you save thanks to our low costs. Plus, you can change your investment mix and transfer eligible money into your account.

If you aren't putting at least 5% of your income into your TSP, to maximize the matching contributions from your agency, you're turning down free money.

Catch-Up Contributions Limit (IRC Section 414(v))

The IRC § 414(v) catch-up contribution limit for 2022 is $ 6,500.

So, to answer the question, we believe having one to one-and-a-half times your income saved for retirement by age 35 is a reasonable target. It's an attainable goal for someone who starts saving at age 25. For example, a 35-year-old earning $60,000 would be on track if she's saved about $60,000 to $90,000.

As we stated earlier, research by the Federal Reserve found that the median retirement account balance in the U.S. – looking only at those who have retirement accounts – was just $65,000 in 2019 (the survey is conducted every three years). The conditional mean balance was $255,200.

Accelerating inflation and rising interest rates led to a rout in stocks over the last six months. The S&P 500 index (the index on which the TSP's C Fund is based) is down 21% through June 30, 2022 (the C Fund is down 19.96%). This loss is the worst six months in the start of a year since 1970.

The TSP's performance in April 2022 reflected the worst showing for the stock market and most of the funds in the Thrift Savings Plan (TSP) in months. Inflation, the Russia/Ukraine war, and a general negative sentiment about the direction of the country have taken a toll on financial markets.

Is it OK to only invest in S&P 500? ›

That said, you shouldn't necessarily invest exclusively in the S&P 500. There are other indices, sectors, and groups of stocks you can invest in through mutual funds and ETFs, and there are some excellent individual stocks you can invest in.

Experts agree that for most personal investors, a portfolio comprising 5 to 10 ETFs is perfect in terms of diversification. But the number of ETFs is not what you should be looking at. Rather, you should consider the number of different sources of risk you are getting with those ETFs.

Based on the year you were born, the L 2025 Fund may be a good choice for you because it decreases exposure to risk as you near retirement. Based on the year you were born, the L 2030 Fund may be a good choice for you because you may have time to ride out any fluctuations in the market.

– What is the safest TSP fund? The G fund is generally the safest option as it invests in government securities. Although you won't lose money investing in this fund, your rate of return will be low. This may be a good option if you are close to retirement.

While the C-Fund invests in companies that are included in the S&P 500, the S-fund includes smaller companies than those that would be found in the C-fund. The “S” in S-fund stands for “small company stocks” but includes companies with market capitalizations that are considered medium-sized and large.

The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.

If you are eligible and would like to maximize the contribution of both the deferral limit and the catch-up contribution, you would need to make an election of $1,154 per pay period ($866+$288 = $1,154). Elections must be made starting in pay period 26 of 2022 to take effect during the first pay period of 2023.

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.

I frequently state that there is no such thing as too much money in the Thrift Savings Plan. If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire.

Is the C fund aggressive? ›

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.