What TSP fund is performing the best?
Best Performance Among Lifecycle Funds
The L 2050 fund had an excellent return of 16.34% and the L 2045 returns 15.4%. For more conservative investors, note that the G Fund (often considered the safest TSP Fund) had a return of 1.38% for the year.
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.
Many investors consider the G fund the safest bet. Many switched to the G fund during the Great Recession (2008-9) when stocks tanked. Some still have not come back although the market returns since then have been very, very good, until last month.
While investment in the S Fund carries risk, it also offers the opportunity to experience gains from equity ownership of small-to-mid-sized U.S. companies. It provides an excellent means of further diversifying your domestic equity holdings.
Risks and Potential Rewards of Investing in the S Fund
As can be seen from the performance charts and statistics above, the S Fund is somewhat more volatile (higher risk) than the C Fund. This is because the S Fund holds smaller company stocks, which historically have been more volatile than large cap stocks.
The TSP's C Fund bounced back in March with a return of 3.72% after losing 2.99% in February. The C Fund is still down 4.59% for the year-to-date but it is up 15.63% for the past 12 months. The G Fund, sometimes thought to be the safest TSP fund, is up 1.56% over the past 12 months and up 0.44% for the year-to-date.
The TSP C Fund is a U.S. stock index fund invested in common stocks of the 500 companies in the Standard & Poor's 500 (S&P 500) Index. Many of the stocks in the index are household names, such as General Electric, Coca Cola, Exxon Mobil, and Walt Disney.
“For TSP Fund investors, we currently recommend shifting investments from the C, S, and I stock funds into the G bond fund,” he says. More than 3 million federal employees invest in the TSP (Thrift Savings Plan) Funds.
The TSP F Fund is a U.S. bond index fund. The fund uses a “passive management” (indexing) investment approach, designed 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 provides broad exposure to U.S. investment grade bonds.
The main difference between the two funds is that the G is invested in short-term government securities, and the F tracks an aggregate bond index fund. The F Fund provides a higher return than the G Fund but with a little more risk. However, the risk is still lower than other individual funds in the TSP.
What is the average TSP balance at retirement?
There are 287,000 Civil Service Retirement System participants, with an average account balance at the end of 2020 of $175,000.
How much should I have in my TSP up to 40? Retirement Savings Goals At age 40, you should have three times your annual salary. At age 50, six times your salary; at age 60, eight times; and at age 67, 10 times. 8ï »¿If you reach age 67 and earn $75,000 a year, you should have $750,000 saved.
| Thrift Savings Plan — April 2022 Returns | ||
|---|---|---|
| G fund | 0.20% | 0.65% |
| F fund | -3.75% | -9.33% |
| C fund | -8.72% | -12.91% |
| S fund | -10.57% | -18.83% |
Increase your contributions each year
Most people don't start contributing the maximum their first day on the job, therefore it is important to increase your contributions as you start to make more. Every time you receive a COLA or a step increase you should consider increasing your TSP contributions.
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. The C Fund can also be useful in a portfolio that contains bonds.
How Much Should You Invest in a TSP Account? We recommend investing 15% of your income for retirement. When you contribute 15% consistently, you set yourself up to have options when you retire.
Alternatives to the C Fund are iShares Core S&P 500 ETF (IVV) or Vanguard S&P 500 ETF (VOO). A mutual fund version of the C fund could be Fidelity 500 Index Fund (FXAIX). All of these funds have low costs equivalent to the C fund.
The Common Stock Index Investment (C) Fund
The C Fund is invested in a stock index fund that tracks the Standard & Poor's 500 (S&P 500) Index. This is a broad market index made up of the stocks of 500 large to medium-sized U.S. companies.
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TSP Returns in 2022: One Fund is Up and One Down 13.30%
If interest rates rise, how much can the F Fund lose? The longer a bond's duration, the greater the volatility and potential losses when interest rates change. The F Fund holds thousands of bonds of various durations.
Is TSP better than 401k?
While they may not have as many funds to choose from, TSP participants do have one big advantage over most 401(k) investors: lower fees. The total expense ratio, which covers both investment and administrative fees, is 0.055% for individual TSP funds.
The overall risk is relatively low in comparison to certain other fixed income investments in the market because the F Fund includes only investment-grade securities. Am I ok with market and inflation risk? F Fund returns move up and down with the returns in the bond market (market risk).
While the G Fund does not guarantee inflation protection, it is highly likely to provide it, and then some. TIPS guarantee your principal against inflation and pay a fixed rate of interest on that principal every six months until maturity.
The fixed-income (F) fund's earnings come from changes in market prices as well as interest. Neither of those funds have any dividends.
As of Dec. 31 it has dropped down to 21,432. The average Thrift Savings Plan balance for Federal Employees Retirement System participants — 3.3 million people — was $138,933 in January. That compares to an average TSP account balance of $146,642 for the 314,193 Civil Service Retirement System participants.
If you choose the invest-for-the-long haul course you may, as 112,000 rank-and-file federal and postal workers have done, become a TSP millionaire. Maybe with $2-3 million which, along with your steady federal annuity and inflation-indexed Social Security will guarantee you a better retirement. As in much better.
Age 50—five times annual salary. Age 55—six times annual salary. Age 60—seven times annual salary. Age 65—eight times annual salary.
According to AARP, a good retirement income is about 80 percent of your pre-tax income prior to leaving the workforce. This is because when you're no longer working, you won't be paying income tax or other job-related expenses.
If you have $500,000 in savings, according to the 4% rule, you will have access to roughly $20,000 per year for 30 years. Retiring abroad in a country in South America may be more affordable in the long term than retiring in Europe.
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Average net worth by age.
| Age of head of family | Median net worth | Average net worth |
|---|---|---|
| 35-44 | $91,300 | $436,200 |
| 45-54 | $168,600 | $833,200 |
| 55-64 | $212,500 | $1,175,900 |
| 65-74 | $266,400 | $1,217,700 |
Has the TSP G fund lost money?
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The G Fund Has Seen Better Days.
| Year | Return |
|---|---|
| 2005 | 4.49% |
| 2010 | 2.81% |
| 2015 | 2.04% |
| 2020 YTD | 0.76% |
