The total expense ratio for the TSP hit 7.6 basis points (or, 0.076% of the invested amount that the account holder pays for managing the investments) in 2021, and from what information is available, seems to have dipped to 0.069% the next year, but this is still considerably higher than the 0.058% charged back in 2020. For funds such as G, C, and S – the ratios are still climbing higher.
The S fund’s cost escalated from 6.8 basis points in 2020 to 9 basis points in 2022- an increase of 32.4%. The C fund went from 0.051% to 0.059%, going up 15.6%. And the G-fund has gone from 49 basis points to 57 in the same timeframe, which means it has been raised 16.3%. When the expenses were first increased, the reason given was that it was to cover the costs of the modernization efforts undertaken from 2020 to 2022 (think the new website and mutual fund window), but with those “improvements” now implemented, there is little evidence that suggests the cost of the TSP funds will fall back to pre-2020 levels.
All being said, the expense ratios of the TSP funds are still competitive with similar investments even if they are no longer the absolute lowest like around 2018 or so. But if these costs continue to rise, the TSP will start to lose its grip on a reputation for having low costs.
—-
Until Next Time,
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 Serving Those Who Serve writers 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. **
Expense ratios for Thrift Savings Plan (TSP) funds have increased, eroding one of the plan’s greatest characteristics.
The expense ratios for the core TSP funds have seen a significant bump since the beginning of this decade. While from 2010 to 2019, the percentages hovered around 30 to 40 basis points, there was a dramatic 30% increase back in 2020 and it doesn’t appear that the administrative and investment costs for the TSP funds are going back down any time soon.
These expenses are standard in the investment industry, and the TSP has always been touted for its low costs. However, as the fees continue to stay around the current levels and even increase, this appealing aspect of the retirement plan is diminishing.
The total expense ratio for the TSP hit 7.6 basis points (or, 0.076% of the invested amount that the account holder pays for managing the investments) in 2021, and from what information is available, seems to have dipped to 0.069% the next year, but this is still considerably higher than the 0.058% charged back in 2020. For funds such as G, C, and S – the ratios are still climbing higher.
The S fund’s cost escalated from 6.8 basis points in 2020 to 9 basis points in 2022- an increase of 32.4%. The C fund went from 0.051% to 0.059%, going up 15.6%. And the G-fund has gone from 49 basis points to 57 in the same timeframe, which means it has been raised 16.3%. When the expenses were first increased, the reason given was that it was to cover the costs of the modernization efforts undertaken from 2020 to 2022 (think the new website and mutual fund window), but with those “improvements” now implemented, there is little evidence that suggests the cost of the TSP funds will fall back to pre-2020 levels.
All being said, the expense ratios of the TSP funds are still competitive with similar investments even if they are no longer the absolute lowest like around 2018 or so. But if these costs continue to rise, the TSP will start to lose its grip on a reputation for having low costs.
—-
Until Next Time,
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 Serving Those Who Serve writers 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. **
Expense ratios for Thrift Savings Plan (TSP) funds have increased, eroding one of the plan’s greatest characteristics.
The expense ratios for the core TSP funds have seen a significant bump since the beginning of this decade. While from 2010 to 2019, the percentages hovered around 30 to 40 basis points, there was a dramatic 30% increase back in 2020 and it doesn’t appear that the administrative and investment costs for the TSP funds are going back down any time soon.
These expenses are standard in the investment industry, and the TSP has always been touted for its low costs. However, as the fees continue to stay around the current levels and even increase, this appealing aspect of the retirement plan is diminishing.
The total expense ratio for the TSP hit 7.6 basis points (or, 0.076% of the invested amount that the account holder pays for managing the investments) in 2021, and from what information is available, seems to have dipped to 0.069% the next year, but this is still considerably higher than the 0.058% charged back in 2020. For funds such as G, C, and S – the ratios are still climbing higher.
The S fund’s cost escalated from 6.8 basis points in 2020 to 9 basis points in 2022- an increase of 32.4%. The C fund went from 0.051% to 0.059%, going up 15.6%. And the G-fund has gone from 49 basis points to 57 in the same timeframe, which means it has been raised 16.3%. When the expenses were first increased, the reason given was that it was to cover the costs of the modernization efforts undertaken from 2020 to 2022 (think the new website and mutual fund window), but with those “improvements” now implemented, there is little evidence that suggests the cost of the TSP funds will fall back to pre-2020 levels.
All being said, the expense ratios of the TSP funds are still competitive with similar investments even if they are no longer the absolute lowest like around 2018 or so. But if these costs continue to rise, the TSP will start to lose its grip on a reputation for having low costs.
—-
Until Next Time,
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 Serving Those Who Serve writers 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. **
Expense ratios for Thrift Savings Plan (TSP) funds have increased, eroding one of the plan’s greatest characteristics.
The expense ratios for the core TSP funds have seen a significant bump since the beginning of this decade. While from 2010 to 2019, the percentages hovered around 30 to 40 basis points, there was a dramatic 30% increase back in 2020 and it doesn’t appear that the administrative and investment costs for the TSP funds are going back down any time soon.
These expenses are standard in the investment industry, and the TSP has always been touted for its low costs. However, as the fees continue to stay around the current levels and even increase, this appealing aspect of the retirement plan is diminishing.
The total expense ratio for the TSP hit 7.6 basis points (or, 0.076% of the invested amount that the account holder pays for managing the investments) in 2021, and from what information is available, seems to have dipped to 0.069% the next year, but this is still considerably higher than the 0.058% charged back in 2020. For funds such as G, C, and S – the ratios are still climbing higher.
The S fund’s cost escalated from 6.8 basis points in 2020 to 9 basis points in 2022- an increase of 32.4%. The C fund went from 0.051% to 0.059%, going up 15.6%. And the G-fund has gone from 49 basis points to 57 in the same timeframe, which means it has been raised 16.3%. When the expenses were first increased, the reason given was that it was to cover the costs of the modernization efforts undertaken from 2020 to 2022 (think the new website and mutual fund window), but with those “improvements” now implemented, there is little evidence that suggests the cost of the TSP funds will fall back to pre-2020 levels.
All being said, the expense ratios of the TSP funds are still competitive with similar investments even if they are no longer the absolute lowest like around 2018 or so. But if these costs continue to rise, the TSP will start to lose its grip on a reputation for having low costs.
—-
Until Next Time,
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 Serving Those Who Serve writers 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 FedLife Podcast is your in-depth, biweekly deep dive into the world of federal benefits and retirement planning. Hosted by federal benefits expert Ed Zurndorfer and Dan Sipe of Serving Those Who Serve, each 30-minute episode unpacks the complexities of FERS and CSRS retirement, FEHB and Medicare, survivor benefits, tax planning, and more. Designed for federal employees and retirees who want more than just the basics, FedLife goes beyond the headlines to explore the rules, nuances, and strategies that can make a meaningful difference in your retirement. Remember: it’s your Fed life, make it a great one.
The Fed15 Podcast is your weekly 15(ish)-minute briefing on federal benefits and financial planning, built specifically for federal employees and retirees. Hosted by Dan Sipe and Katelyn Murray of Serving Those Who Serve, each episode delivers clear, actionable guidance on topics like FERS and CSRS retirement, TSP strategies, FEHB, survivor benefits, tax planning, and more! Whether you’re five years from retirement or already there, The Fed15 helps you cut through the noise, avoid costly mistakes, and make confident decisions about your federal benefits.
