TSP Recap - img: snow hiker

Thrift Savings Plan Monthly Update for November 2023, by Jennifer Meyer, CFP®, ChFEBC℠, AIF®

Jennifer Meyer, CFP

November 2023 will go down as one of the best months for markets in recent memory. You may recall that last month I noted that over $2 billion dollars moved into the G fund in during the month of October. October was the third consecutive month for losses in the equity markets.

The month of November demonstrates why it is SO important to not try to time the market by moving in and out of funds. I cannot be certain, but I suspect that most TSP participants who moved into the G fund in October did not get back into the market in time to participate in the November rally. Data shows that missing out on just the 10 best days in the market over multiple years will result in long term returns significantly below what could have been achieved by staying invested through the ups and downs of the market. For the month of November, the S fund was the best performer, and the G fund was the worst. It is noteworthy that the F fund returned 4.51 percent for the month. Quite remarkable to say the least.

Driving this rally is the continued optimism that the Federal Reserve is done hiking interest rates amid what appears to be a slowing U.S. economy. There is much anticipation that the Federal Reserve can achieve lowering high inflation without causing a recession in the economy. This is what some would call the “Goldilocks” scenario that most economists thought would be impossible to achieve. While the jury is still out on the outcome of the economic tug of war, market participants are happy to cheer an excellent month for both stock and bond markets.

For federal employees, successful management of your TSP will have a huge impact on your retirement picture. The alternative is also true, the poor management of your TSP will have a huge impact to the downside. Do not delay becoming educated as to how the maximize this critical component of your retirement. If you have questions on how to best manage your TSP, please schedule a complimentary meeting or attend a TSP webinar. You can find the schedule at stwserve.com/register.

Monthly and year to date returns effective November 30, 2023, and longer-term averages are shown below. (source, TSP.gov)

Year G Fund F Fund C Fund S Fund I Fund
Last 12 months 4.16% 1.13% 13.79% 6.01% 10.25%
2023 YTD 3.82% 1.79% 20.67% 13.44% 12.33%
2023 Monthly          
November 0.41% 4.51% 9.12% 11.19% 8.54%
October 0.40% -1.58% -2.10% -6.26% -3.22%
September 0.35% -2.54% -4.77% -4.90% -3.51%
August 0.35% -0.63% -1.58% -4.06% -3.90%
July 0.34% -0.07% 3.21% 5.91% 2.82%
June 0.32% -0.36% 6.61% 8.31% 4.57%
May 0.31% -1.10% 0.43% 0.44% -4.01%
April 0.30% 0.61% 1.56% -2.18% 2.87%
March 0.35% 2.55% 3.67% -2.90% 3.11%
February 0.28% -2.58% -2.44% -1.63% -2.84%
January 0.34% 3.25% 6.28% 10.82% 8.43%

Month to month trends as shown above are interesting, but it is important to remember that short term market volatility is to be expected and employees should not be making investment decisions based on short term performance. Following are longer term rates of return for each fund, as of November 30, 2023.  (source, TSP.gov).

Year G Fund F Fund C Fund S Fund I Fund
1 year 4.16% 1.13% 13.79% 6.01% 10.25%
3 Year 2.75% -4.33% 9.73% 0.29% 4.08%
5 year 2.32% 0.79% 12.47% 7.23% 6.32%
10 year 2.30% 1.59% 11.82% 7.87% 4.23%
Inception Date 4/1/1987 1/29/1988 1/29/1988 5/1/2001 5/1/2001

Reminder: new contribution limits for 2024 have recently been announced. The regular contribution limit for employees under age 50 is increased to $23,000. The catch-up amount for employees over age 50 remains at $7500. For employees over age 50, the total contribution amount is $30,500 for 2024. An employee who is over age 50 and wishes to max out their contribution would increase the bi-weekly contribution to $1,173 per pay.

Please reach out to us with questions and follow our website for the most recent updates. We are here to serve you! Thank you for your service to our government!

**Written by Jennifer Meyer, CFP®, ChFEBC, AIF®,. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jennifer Meyer and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **

***The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency or service, if you're eligible to receive agency or service contributions) put into your account during your working years and the earnings accumulated over that time. The Federal Retirement Thrift Investment Board (FRTIB) administers the TSP.***

TSP Recap - img: snow hiker

Thrift Savings Plan: TSP Recap for November 2023