TSP Update

TSP Update for Month Ending June 2022: The Thrift Savings Plan’s rough year continues. The S-Fund has fallen almost 30% since 12 months ago.

Jennifer Meyer, CFP

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For TSP participants, the month of June brought continued losses in all but one of the five core funds. The market has continued to test even the most disciplined investors. During June, the S & P 500 officially entered bear market territory, defined as a drop of 20% from a previous all-time high. The Federal Reserve raised interest rates again in June as they continue to try to tame the highest inflation the U.S. has seen in forty years. Economists are split as to whether the Fed can achieve their lower inflation target without pushing the country into a recession. Gas prices climbed to record highs as the summer driving season gets underway. All in all, an ugly month for investors. Transfers into the G fund have soared as weary TSP participants seek less volatile investments in the current downturn. Although it is no doubt difficult to watch your TSP balance go down, historical data have shown that investors benefit longer term by staying invested through downturns. The greatest investors of all time, legends like Warren Buffett and Peter Lynch credit their ability to remain disciplined through the ups and downs of market cycles over time for their success.

As planned, the TSP rolled out a re-vamped website in early June aiming to improve its experience for participants. The initial rollout was plagued with missteps including missing beneficiary information, limited access to historical TSP info, and long wait times for speaking with a phone representative. The issues are being resolved but it has been a frustrating time for the millions of TSP participants.  If you have not already done so, you will need to create a new log in to access your account information. This process will take about 10 minutes and will require two factor authentication.

Performance figures for the month of June 2022 have been posted on the TSP website. The G fund was the best performer for the month, with a positive 0.29% return, while the I fund was the worst, losing 8.21%. Monthly returns from 2022 and year to date returns for 2022 and longer-term averages are shown below. (source, TSP.gov)

Year G Fund F Fund C Fund S Fund I Fund
Last 12 months 1.89% -10.05% -10.62% -29.80% -17.11%
2022 YTD 1.15% -10.08% -19.96% -27.92% -18.95%
2022 Monthly          
June 0.29% -1.94% -6.55% -7.95% -8.21%
May 0.21% 1.13% -1.65% -3.53% 1.19%
April 0.20% -3.75% -8.72% -10.57% -6.39%
March 0.17% -2.73% 3.72% 0.90% -0.33%
February 0.14% -1.08% -2.99% 0.03% -2.61%
January 0.13% -2.09% -5.18% -10.07% -3.96%

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 June 30, 2022.  (source, TSP.gov).

Year G Fund F Fund C Fund S Fund I Fund
1 year 1.89% -10.05% -0.23% -20.01% -10.31%
3 Year 1.48% -0.82% 10.56% 4.61% 1.51%
5 year 1.96% 0.99% 11.27% 6.43% 2.64%
10 year 1.97% 1.79% 12.96% 10.37% 5.78%
Inception Date 4/1/1987 1/29/1988 1/29/1988 5/1/2001 5/1/2001

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.

**Written by Jennifer Meyer, Financial Planner. 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.***

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