2024 TSP Fund Performance: the C Fund has grown almost 30% year-to-date. Federal employees: stay informed with our thrift savings plan monthly update about your retirement investment savings.
The Thrift Savings Plan is Set to Close Out 2024 with High Annual Returns
In 2024, the TSP’s C Fund has emerged as a standout performer, leading a strong year for the plan’s core investment funds with a 29.29% return from January 1 to December 6, 2024 . The S Fund as well as gained over 25% year-to-date as of the end of last week. Both are on pace to beat their performance in 2023 by a percent or two by the end of this year, depending on how the markets behave. Neither are on a downward trend, however, with November being the best month for each equity index fund over the past 11 months. The Thrift Savings Plan (TSP) appears to be on track to have another year of strong growth.
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How the Five Individual TSP Funds Performed this Year (So Far)
Thrift Savings Plan Monthly Update: the C and S Funds
C Fund performance has been strong so far this year, with its best two months coming in February and November with each month at over 5%. As of the end of last month, the investment growth of the C fund was at 28.02% year-to-date (YTD), and as of December 6th, is almost to 30% for 2024 with a YTD return of 29.29%. This is on track to outpace the 2023 investment return on the C fund, which finished that year at 26.25%. The TSP C Fund is a common stock index investment fund that contains stock funds that track the S&P 500. The TSP S fund also contains stock funds, but tracks the US Completion Stock Market Index, which includes small, medium, and large US company stocks.
The S Fund is not far behind its domestic equity counterpart with 25.8% YTD growth as of November 30th and 26.52% YTD as of December 6th. November was by far the best month in terms of performance for the index fund, growing 11.97%, almost double the performance it saw in any other month for the current calendar year. The S fund saw an annual return rate of 25.3% from January 1 to the end of December 2023.
TSP I Fund Not on Pace to Match the Performance of Previous Year
It is difficult to say how much the recent index change, which occurred over the course of 2024, played into the I fund’s weaker performance when compared to the other equity TSP funds. Still, with a 7.3% YTD return as of 11/30/2024 and an 8.9% YTD return as of 12/06/2024, the international investment option in the TSP has had a decent performance so far, but it doesn’t look like it will reach the growth it saw at the end of 2023 when the I fund finished that year with a return of 18.83%. Like the C and S funds, the I fund invests in stocks, but unlike the other two funds, it is invests in non-US companies. The international stock index investment fund now has the objective of matching the performance of MSCI ACWI ex US ex Chine ex Hong Kong Index.
TSP G Fund and F Fund with Decent Growth both Monthly and Year to Date
The TSP F Fund also seems to be underperforming in comparison with the growth it experienced in 2023, but is still in positive territory at 3.09% YTD as of 11/30/2024 and 3.48% as of 12/06/2024. The fixed income index investment fund grew 5.58% last year. The G Fund is about on par with what TSP investors saw in 2023. The G Fund finished November with 4.03% growth YTD, and finished last week with a 4.10% YTD return. The G fund saw a 4.22% annual return rate in 2023. Of the 5 core funds, the F fund is experiencing the weakest year, but the fund offers the opportunity to invest in fixed income in your TSP as it tracks the Bloomberg US Aggregate Bond Index.
The government securities investment fund does not try to match the performance of an index, but rather is a unique investment only available in the TSP. The fund can be useful because there is a guaranteed positive return that is dependent on the rate of short-term US treasury securities, although this return rate is typically lower than the TSP stock funds, which offer TSP investors the opportunity to experience gains from equity ownership.
2023 vs. 2024 TSP Performance for 5 Core Funds
YTD Return as of 11/30/24 | YTD Return as of 12/6/24 | 2023 Annual Return | |
---|---|---|---|
G | 4.03% | 4.1% | 4.22% |
F | 3.09% | 3.48% | 5.58% |
C | 28.02% | 29.29% | 26.25% |
S | 25.8% | 26.52% | 25.3% |
I | 7.3% | 8.9% | 18.83% |
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The C Fund Year to Date Returns Effective December 6, 2024
Analyzing the 2024 YTD Return for the C Fund
The C Fund, which is invested in the S&P 500 Index, has delivered an impressive rate of return in 2024, outperforming many other investment options. This fund’s performance is closely tied to the 500 largest companies available on the US stock market, and its success this year can be attributed to a strong rally in the S&P 500. The C Fund’s returns have been bolstered by gains in major sectors such as technology and healthcare, which have driven the index to new highs.
Factors Influencing C Fund Performance
Several factors have influenced the C Fund’s performance in 2024. The overall health of the stock market, driven by economic growth and corporate earnings, has played a significant role. Additionally, monetary policy decisions by the Federal Reserve, including interest rate adjustments, have impacted investor sentiment and market dynamics. The C Fund’s exposure to large-cap U.S. stocks has also been a key factor, as these companies have generally performed well in the current economic environment. It remains unclear if the incoming administration will end up having a negative, positive, or neutral impact on the markets. Ultimately, it is important to focus more the long-term TSP returns when saving for retirement and to make sure you’re not panicking as a reaction to short-term volatility.
Knowledge is Confidence!
TSP L Funds and Fund Returns YTD
Role of TSP Lifecycle Funds in Retirement Planning
TSP Lifecycle Funds, or L Funds, are designed to simplify retirement planning by automatically adjusting the mix of investments as participants approach retirement. These funds gradually shift from a growth-oriented strategy to a more conservative approach as the federal employee reaches their retirement age, reducing risk as the target retirement date nears. For those who prefer a hands-off investment strategy, L Funds can be an effective tool for managing TSP investments over time.
Evaluating the TSP L Income Fund
The TSP L Income Fund is designed for participants who are already in retirement or nearing retirement. It focuses on preserving capital and providing income, with a conservative mix of investments that includes a higher allocation to the G Fund and F Fund. This fund can be useful for those seeking a stable income stream in retirement, while still maintaining some exposure to growth through stock funds. Evaluating the L Income Fund’s suitability requires careful consideration of individual retirement needs and financial goals.
YTD Return as of 11/30.24 | YTD Return as of 12/6/24 | 2023 Annual Return | |
---|---|---|---|
L Income | 8.09% | 8.48% | 8.99% |
L 2025 | 9.17% | 9.61% | 11.25% |
L 2030 | 13.63% | 14.44% | 15.76% |
L 2035 | 14.57% | 15.46% | 16.91% |
L 2040 | 15.51% | 16.48% | 18.04% |
L 2045 | 16.32% | 17.35% | 19.03% |
L 2050 | 17.14% | 18.24% | 20.00% |
L 2055 | 20.05% | 21.37% | 23.31% |
L 2060 | 20.05% | 21.37% | 23.30% |
L 2065 | 20.05% | 21.37% | 23.31% |
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Find the Best TSP Investment Strategy for Your Financial Picture
Strategies for Balancing TSP Funds
To optimize TSP investments, federal employees should consider a balanced approach that aligns with their risk tolerance and retirement goals. Diversifying across different TSP funds can help mitigate risk and enhance potential returns. Regularly reviewing and adjusting the allocation of funds based on market conditions and personal circumstances is also important. This proactive approach can help participants achieve a well-rounded investment portfolio. Talking with a financial planner that specializes in federal benefits can help!
Consulting with a TSP Planner
Consulting with a financial planner that has experience helping federal workers with retirement planning can provide valuable guidance. Advisors can offer personalized advice based on individual financial goals, risk tolerance, and investment preferences. They can also help participants navigate complex decisions, such as when to rebalance funds or how to incorporate TSP investments into a broader retirement plan. Engaging with a knowledgeable advisor can enhance the effectiveness of a TSP investment strategy and help craft the best one for you. TSP participants should avoid mismanaging their retirement savings and sit down with a federal benefits expert like the Chartered Federal Employee Benefits Consultants here at PlanWell Financial.
Reach Out to Us!
If you have additional federal benefit questions, contact our team of CERTIFIED FINANCIAL PLANNER™ (CFP®) and Chartered Federal Employee Benefits Consultants (ChFEBC℠). At PlanWell, we are federal employee financial advisors with a focus on retirement planning. Learn more about our process designed for the career fed.
Preparing for federal retirement? Check out our scheduled federal retirement workshops. Sign up for our no-cost federal retirement webinars here! Make sure to plan ahead and reserve your seat for our FERS webinar, held every three weeks. Want to have PlanWell host a federal retirement seminar for your agency? Reach out, and we’ll collaborate with HR to arrange an on-site FERS seminar.
Want to fast-track your federal retirement plan? Skip the FERS webinar and start a one-on-one conversation with a ChFEBC today. You can schedule a one-on-one meeting here.