Your Monthly Thrift Saving Plan Recap: September 2021

For the first time this year, every core TSP fund (core funds include the G, F, C, S, and I fund), except for the G fund recorded losses for the month ended September 30. However, the three stock funds-  C, S, and I continued to show positive returns on a year to date and last 12 months period. The only fund to show negative returns year to date and over the last 12 months is the bond-focused F fund. The S fund held on to the top spot for best performing fund over the last 12 months at 42.32%, with the C fund trailing significantly at 29.98% over the same time period. However, the C fund remains on top on a year-to-date basis for 2021 at 15.90% beating the S fund’s performance of 11.66% over the same timeframe.

September’s volatility began with news that Chinese-based global real estate conglomerate Evergrande was in danger of missing significant bond payments to multiple lenders. At home, concerns over rising inflation, continued difficulty in Congressional negotiations over the infrastructure bill and debt ceiling, the likely start of upcoming Fed tapering, and uncertainty about 3^rd quarter earnings due to supply chain issues created significant market jitters.  While the world continues to deal with the covid pandemic, many U.S. corporations and governments are implementing vaccine mandates for their employees. The federal government has announced that all employees, except those with an exemption, are required to be vaccinated by November 22, 2021. Time will tell how the government intends to enforce the mandate, and there are several legal challenges to the mandate pending.

Performance figures for the month of September 2021 have been posted on the TSP website. The best performer for the month was the G fund at 0.11%, while the C fund was the worst for the month, at -4.65%. Monthly and year-to-date returns for 2021 are shown below. (source, TSP.gov)

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, 2021. (source, TSP.gov).

The TSP is a critical part of an employee’s retirement plan. While no one can predict what 2021 will bring with regards to investment returns, we do know that it is important that TSP participants take a proactive role in monitoring their TSP accounts. This does not mean checking their balances and trying to time the market. Rather, it means being aware of the options available and managing those options to maximize your personal retirement outcome. At Serving Those Who Serve, we have found many employees do not truly understand the Roth TSP versus Traditional TSP. Our podcast featuring Ed Zurndorfer is a great educational resource. If you have not previously contributed to Roth TSP- it may be a good time to start before the end of 2021. As long as a contribution is made before year-end, an employee will be credited with a Roth TSP start date of January 1, 2021. Please reach out to us with questions about this rule.

Please also make sure to check that your TSP Beneficiary information is up to date. Our advisors find that a good percentage of employees have either no beneficiary on file- or what is on file is out of date. This is a critical part of planning to ensure the funds you have worked so hard to build will end up in the hands of the people or charities you desire.

Please reach out to us with questions and follow our website for the most recent updates. We also run a monthly TSP webinar focused on education and presented by federal benefits expert, Ed Zurndorfer. Here is a link to our upcoming webinars.