Thrift Savings Plan Monthly Update for September 2023, by Jennifer Meyer, CFP®, ChFEBC℠, AIF®
September continued the slide in stock market returns which began in August. For the second consecutive month, all three stock 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. However, looking at the year to date, all five core funds remain positive, and on a 12-month basis all are positive as well. While the C fund has been the strongest performer year to date at 13.05%, the I fund is the best performer on a 12-month basis with a return of over 26%. How many readers have funds in the I fund? In my experience many do not and as a result have missed out on a great one-year return.
Many are blaming the continuing threat of higher interest rates for the current market pullback. It is fair to say that the actions of the Federal Reserve continue to be important for near term returns. The fear of inflation creeping back up while the employment market continues to be resilient has many believing we could see at least one more rate hike this year. The Fed will be paying close attention to upcoming inflation and unemployment numbers as they consider future rate hikes.
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 September 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 | 4.04% | 0.35% | 19.75% | 13.72% | 26.04% |
| 2023 YTD | 2.98% | -1.05% | 13.05% | 8.84% | 6.94% |
| 2023 Monthly | |||||
| 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 August 31, 2023. (source, TSP.gov).
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| 1 year | 4.04% | 0.35% | 19.75% | 13.72% | 26.04% |
| 3 Year | 2.51% | -5.10% | 10.43% | 4.95% | 5.75% |
| 5 year | 2.26% | 0.19% | 9.88% | 4.51% | 3.52% |
| 10 year | 2.25% | 1.35% | 11.85% | 7.99% | 4.04% |
| Inception Date | 4/1/1987 | 1/29/1988 | 1/29/1988 | 5/1/2001 | 5/1/2001 |
The question I am frequently asked these days is whether or not the rally of 2023 simply on pause, or is this the start of another downturn for markets? Those who know me know my answer is always, I do not know what the short term holds. I do know that the best way to minimize risk and maximize return is by diversifying across asset classes and being disciplined through periods of market volatility (discipline= not moving in and out of funds due to market volatility).
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!
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**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.***
