As we wrap up the first half of 2024, there is much to cheer about for TSP participants as the stock funds all show positive year to date gains. The C fund turned in a stellar first half of the year with an impressive year to date return of 15.28%. Interestingly, many market watchers have noted that most of this return can be credited to the outsized returns of just a few stocks, namely Nvidia, Meta Platforms, and Alphabet (Google). Keep in the mind that the C fund represents only the 500 largest companies in the U.S. The fact that just a few companies are contributing so much to the performance of the overall index is somewhat worrisome, but the overall market sentiment continues to be strong.
Year to date, the worst performing fund is the F fund. Bonds continue to struggle to break out of their bear market cycle which began in 2022 when the Federal Reserve began raising interest rates. There is continued hope for interest rate cuts in 2024, which would likely help the performance of the F fund, should that come to pass.
I am often asked what it takes to become a “TSP Millionaire.” This is a milestone that many employees strive for when considering their retirement planning. I agree that for most federal employees, this is a great goal and often is a target that when combined with a FERS pension and social security will provide a reasonable starting point for a comfortable retirement. However, there is not one single factor that will get you that “millionaire” status. In my career, I have met many TSP Millionaires, and I can tell you the most common theme is good habits and discipline. I understand that life happens, but I believe that you too can be a TSP Millionaire with commitment and discipline. The first step I would take is to become as educated as you can about how the TSP works. Do this sooner rather than later! TSP is a great savings vehicle when used properly.
To that end, we offer a monthly TSP webinar and complimentary consultations to help federal employees develop a strategy they can stick to through the ups and downs of market cycles. Please take advantage of the resources available to you. Our webinars are free so there is no excuse! The successful management of your TSP will have a huge impact on your retirement. If you have neglected it in the past, make it a priority to educate yourself sooner rather than later!
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: https://www.stwserve.com/webinars-and-seminars/webinars-for-federal-employees/. You can also schedule a complimentary consultation with me using this link, https://calendly.com/jennifer-meyer-2/part-2a-jennifer.
Monthly and year to date returns effective June 30, 2024, and longer-term averages are shown below. (source, TSP.gov)
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|---|
| Last 12 months | 4.55% | 2.10% | 26.63% | 16.54% | 12.86% |
| 2024 YTD | 2.21% | -0.63% | 15.28% | 3.28% | 5.85% |
| June | 0.38% | 0.94% | 3.58% | -0.10% | -1.62% |
| May | 0.41% | 1.69% | 4.96% | 3.36% | 4.86% |
| April | 0.35% | -2.47% | -4.08% | -6.46% | -3.17% |
| March | 0.38% | 0.87% | 3.22% | 3.33% | 3.36% |
| February | 0.33% | -1.41% | 5.34% | 6.03% | 2.74% |
| Jan 2024 | 0.34% | -0.19% | 1.68% | -2.41% | -0.22% |
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, 2024. (source, TSP.gov).
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
|---|---|---|---|---|---|
| 1 year | 4.55% | 2.10% | 26.63% | 16.54% | 12.86% |
| 3 Year | 3.39% | -2.88% | 10.05% | -2.56% | 2.96% |
| 5 year | 2.54% | -0.16% | 15.00% | 8.67% | 6.83% |
| 10 year | 2.42% | 1.53% | 12.85% | 8.38% | 4.74% |
| 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 are here to serve you! Thank you for your service to our government!
Until next month,
A seasoned financial advisor, Jen is renowned for her expertise in federal benefits and financial planning for feds. Jen’s nearly 30-year industry background coupled with her CERTIFIED FINANCIAL PLANNER™ and Chartered Federal Employee Benefits Consultant℠ designations empower her to guide clients confidently on the path to financial independence. Growing up in a family of federal employees, she’s incredibly proud to serve the federal community. Known for her empathetic approach and deep understanding of economic impacts on planning, Jen is dedicated to her clients’ financial prosperity.
Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
**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.***
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.
