What funds should I put my TSP in?
How much should I contribute to my TSP? One common suggestion for how much to save for retirement is at least 15% of your income. Others believe that the minimum should be whatever maximizes your employer contribution; in the case of TSP funds, that would be 5% of your income.
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.
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TSP Returns in 2022: One Fund is Up and One Down 13.30%
| FUND | PRICE | Year-to-Date |
|---|---|---|
| G Fund | $16.7775 | 0.24% |
| F Fund | $20.1212 | -3.67% |
| C Fund | $65.1148 | -9.50% |
| S Fund | $72.3451 | -13.30% |
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.
Dave Ramsey is very fond of both Roth IRAs and the Roth TSP. That is why, the vast majority of the time, Dave Ramsey tells people to just use the Roth TSP instead of the traditional TSP.
Investors in the C Fund were not the only TSP investors coming out ahead in the past year. The S Fund had a return of 12.45% and the I Fund had a return of 11.45%. For those who closely track their investments, the S Fund finished ahead of all others in 2020 with a return of 31.85% and a return of 27.97% in 2019.
Considered a safer investment, it is typical to see TSP participants allocate more of their retirement savings into the F-fund the closer they get to retirement. When it comes to the bond market, it is important to remember that when interest rates drop, prices go up, and vice versa.
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.
C Fund is Best Performing TSP Fund Over 12 Months
Among the core TSP funds, the fund with the worst performance over the past twelve months is the S Fund which is down 5.31%. The G Fund is up 1.56% over the past twelve months. The S Fund also finished the month with a positive return of 0.90%.
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.
How is the TSP C fund doing?
The C Fund (Common Stocks) increased 28.68% in 2021, after reversing a -0.69% loss in November to a 4.48% gain in December. By comparison, the benchmark S&P 500 index closed out 2021 with a gain of 26.9%, or a total return of 28.7% including dividends.
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.
It's an “elite club.” With over 75,000 members, the TSP millionaires received their title by contributing to the TSP for 25-30 years, being at least moderately aggressive with investing their funds. New members are welcome, but once you make it to the financial “top”, you need to work just as hard to stay there.
| TSP Investment Funds 8/31/1990 - 5/13/2022 | TSP G Fund | TSP S Fund |
|---|---|---|
| 1-Year Return | 1.68% | -17.98% |
| 3-Year Return | 1.45% | 8.38% |
| 5-Year Return | 1.94% | 8.42% |
| 10-Year Return | 1.95% | 11.02% |
The TSP L 2050 Fund is one of the TSP Lifecycle Funds, designed for investors who plan to withdraw their money beginning 2048 through 2052. It aims to achieve a high level of growth with a very low emphasis on preservation of investment capital.
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.
G Fund Returns
The G Fund has earned a compound annualized return of 4.3% since August 1990. Its year-to-date return is 0.72%, and its 1-year return is 1.67%. A $1,000 investment in 1990 would be worth $3,749 today.
The fixed-income (F) fund's earnings come from changes in market prices as well as interest. Neither of those funds have any dividends.
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.
| Age | Average Contribution Rate | Average Balance |
|---|---|---|
| 30-39 | 8% | $38,400 |
| 40-49 | 8% | $93,400 |
| 50-59 | 10% | $160,000 |
| 60-69 | 11% | $182,100 |
Can you retire with 300k?
In most cases $300,000 is simply not enough money on which to retire early. If you retire at age 60, you will have to live on your $15,000 drawdown and nothing more. This is close to the $12,760 poverty line for an individual and translates into a monthly income of about $1,250 per month.
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Is Now The Best Time to Invest in The TSP?
| Sally | Frank | |
|---|---|---|
| Total Contributions | $144,000 | $240,000 |
| Balance at Retirement | $563,000 | $569,000 |
Summary: The TSP C Fund (Common Stock Index Investment Fund) is a U.S. large cap stock index fund that tracks the S&P 500 index.
The Thrift Savings Plan's mutual fund window opens this summer. The new TSP option will feature over 5,000 mutual funds, but carry hefty fees and restrictions.
Lifecycle (L) Funds
Each of the ten L Funds is a diversified mix of the five core funds (G, F, C, S, and I). They were designed to let you invest your entire portfolio in a single L Fund and get the best expected return for the amount of expected risk that is appropriate for you.
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.
Neither of those funds have any dividends. The earnings of the F, C, S and I funds are reduced by administrative costs (which are the lowest anywhere, by a wide margin) and management costs from Barclays Global Investors, which runs the investments. Share prices are calculated after deducting these costs.
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. It offers you the potential to earn the higher investment returns associated with equity investments.
The 2022 TSP contribution limit for employee deferrals is $20,500, a roughly 5% increase from the $19,500 limit in 2020 and 2021. The catch-up contributions also remain the same as last year, set at $6,500 per year. (Catch-up contributions are only available to persons aged 50 and up.)
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.
How many TSP millionaires in 2021?
In the last quarter of 2021, the number of millionaires investing in the Thrift Savings Plan (TSP) spiked significantly by almost 50%. As of Dec. 31, there were 112,880 TSP millionaires, up from 75,420 a year ago, according to the Federal Retirement Thrift Investment Board. What sets these TSP millionaires apart?
Bad news: Too many people know it! The number of federal/postal workers who have become Thrift Savings Plan millionaires has skyrocketed in recent years.
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Core TSP Fund Results in October.
The TSP L 2025 Fund is one of the TSP Lifecycle Funds, designed for investors who plan to withdraw their money beginning 2021 through 2027. It aims to achieve a moderate level of growth with a moderate emphasis on preservation of investment capital.
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. It offers you the potential to earn high investment returns over the long term.
What many people are aware of, but overlook, is the fact that the TSP has the lowest administrative fees in the 401(k) business. Even lower than Vanguard, which prides itself on minimal fees. For lots of math-challenged people (like me), low fees are less important than performance.
