What is the best TSP fund to invest in 2023?
The international (I) fund saw the second-best monthly performance of the TSP's core offerings, growing 5.39%. Since January of last year, the I Fund has posted increases to the tune of 18.38%. And the fixed income (F) fund gained 3.72% last month, bringing its performance to 5.58% for 2023.
Best Funds for TSP Performance in 2023
So far in 2023, the C Fund is up 16.88%, the S Fund is up 12.64%, and the I Fund is up 12.16%. Over the last 12 months, the C Fund is up 19.54%, the I Fund is up 19.08%, and the S Fund is up 15.24%.
The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds. The small- and mid-size businesses of the S Fund posted the strongest numbers in February, gaining 6.03%. That's good enough to bring the fund 3.48% into the black in 2024.
You might consider investing more in our stock funds (C, S, and I) than in the more conservative G and F Funds at this stage of your career. Stocks present more risk but offer the opportunity for potentially higher returns over time.
The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.
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.
If you choose to invest in the G Fund, you are placing a higher priority on the stability and preservation of your money than on the opportunity to potentially achieve greater long-term growth in your account through investment in the other TSP funds.
On the opposite side of the volatility spectrum, the S Fund (small cap U.S. stocks) has the largest annualized standard deviation: 21.44% as of this writing, and is therefore the riskiest.
Thrift Savings Plan F Fund Monthly Returns is at -1.41%, compared to -0.19% last month and -2.58% last year. This is lower than the long term average of 0.44%.
The primary difference between Roth and traditional TSPs is how they're taxed. Specifically, a traditional TSP is better if you want to leverage your account to decrease your current income taxes and pay for withdrawals during retirement.
Should I move my TSP to the G fund?
It's a popular choice since your money is safe from market downturns. These are worry-free investments, but they still come with an opportunity cost – the G Fund annual average growth over the last 10 years was only 1.94%. Yes, your money is protected but you're missing out on much better returns.
Here are some general guidelines for asset allocation based on age: 20s-30s: 70-80% stocks, 20-30% bonds. 40s-50s: 50-60% stocks, 40-50% bonds. 60s and beyond: 30-40% stocks, 60-70% bonds.
You should consider investing in the L Income Fund if you were born before 1961, are currently withdrawing money from your TSP account, or you plan to begin withdrawing money this year. Am I ok with market and inflation risk? The L Income Fund can have periods of gain and loss, just as the individual TSP funds do.
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.
As of year-end 2023 just under 117,000 TSP investors had $1 million or more in their accounts, an increase of some 40,000 during the year, another impact of the rebound in stock-based investment funds during the year making up for their losses of 2022.
- To make equal contributions over the course of the 2024 calendar year (for 26 pay periods), you should contribute $885 each pay period.
- You should enter your election of $885 into myPay during December 3 – 9, 2023, and your election should be effective on December 17, 2023, the first pay period for 2024.
To receive the maximum Agency or Service Matching Contributions, you must contribute 5% of your basic pay each pay period.
However, it's essential to be aware of the drawbacks, such as limited investment flexibility, early withdrawal penalties, RMD requirements, and basic financial education resources. When considering the TSP, take time to assess how well it aligns with your financial goals, risk tolerance, and long-term retirement plans.
Average TSP balances
The average TSP balance has grown steadily in the last decade, reaching the six-figure mark in 2013. As of 2021, the average TSP balance for FERS participants was $181,279, while the average TSP balance for CSRS participants was $194,424.
For federal employees, TSPs' automatic contributions, higher employer matches and low fees probably make them a superior choice. For people who don't work for the federal government, 401(k) plans are still a good choice for retirement savings and can be central parts of individual financial strategies.
What is the TSP G fund rate of return?
G Fund Returns
The G Fund has earned a compound annualized return of 4.2% since August 1990. Its year-to-date return is 0.94%, and its 1-year return is 4.30%.
Basic Info. Thrift Savings Plan C Fund Monthly Returns is at 5.34%, compared to 1.68% last month and -2.44% last year. This is higher than the long term average of 0.96%.
The C Fund is moderately volatile and is subject to market risk as the price of stocks in the S&P 500 Index rise and fall. Further, you are exposed to inflation risk if your C Fund investment does not grow enough to offset inflation.
With Roth TSP, your contributions go into the TSP after tax withholding. That means you pay taxes on your contributions at your current income tax rate. The advantage of the Roth TSP is that you won't pay taxes later when you take out your contributions and any qualified earnings.
Once you retire from federal service, you can no longer contribute to your TSP. However, that doesn't mean that your TSP won't continue to grow. You will benefit from compound interest, and you can still transfer retirement assets from other existing accounts, such as a 401(k) or IRA.
