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

Jennifer Meyer, CFP

October did not bring any relief to weary market participants. For the fourth consecutive month, four of the five core TSP funds were in the red. The only fund to deliver a positive result for the month was the G fund, keeping true to its promise to provide stable, consistent returns. Year to date, the F fund slipped back into negative territory as bond market volatility increased during the month. The I fund continued to be the best performer on a 12-month basis with a return of over 15%. The C fund is the best performer year to date at 10.67%.

TSP investors appear to be concerned, moving over $2 billion dollars into the G fund during the month. As of this writing, the market has staged a strong rally into the first week of November. In fact, the first week of November posted the best weekly return for the market so far this year. As advisors, we encourage investors to not move funds around in an attempt to time the market. This is an incredibly difficult task and data shows that it is usually more harmful than helpful when looking at investors long term results. In fact, research shows that the most successful investors have a disciplined strategy that they stick to in times of market volatility.

The U.S. economy has continued to show resilience in 2023 as the fastest interest rate hiking cycle in history nears its end. While it is certainly possible to have another hike, many economists believe we are very close to the end of this cycle. What happens next will largely depend on upcoming inflation and employment data.

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 here.

Monthly and year to date returns effective October 31, 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 4.10% 0.34% 10.10% -1.23% 15.51%
2023 YTD 3.40% -2.61% 10.67% 2.03% 3.49%
2023 Monthly          
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 September 30, 2023.  (source, TSP.gov).

Year G Fund F Fund C Fund S Fund I Fund
1 year 4.10% 0.34% 10.10% -1.23% 15.51%
3 Year 2.63% -5.42% 10.34% 2.38% 6.27%
5 year 2.29% 0.03% 10.97% 5.38% 4.56%
10 year 2.27% 1.11% 11.18% 7.00% 3.46%
Inception Date 4/1/1987 1/29/1988 1/29/1988 5/1/2001 5/1/2001

Finally, 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 Funds ; image: pumpkins and red arrow down

Thrift Savings Plan: TSP Funds Sink in October