TSP performance review and why expert planning matters when it comes to your federal retirement plan. Discover how a financial advisor can help federal employees maximize benefits and navigate TSP strategies.
TSP Fund Performance in 2024 and Other Thrift Savings Plan News
With the right strategies and guidance, federal employees can leverage their TSP savings to ensure a comfortable retirement. This article reviews how the investments in the retirement plan fared last year, the role of financial advisors who help federal employees understand their benefits, and the importance of comprehensive financial planning in 2025. We’ll also look at the upcoming in-plan Roth conversion that will be available to tsp investors starting next year.
Annual Report Card for TSP Returns: C Fund Finishes Year Up 25%
One TSP Fund Outpaces the Rest Over Last 12 Months
All of the core 5 investments funds in the retirement savings plan for U.S. federal government employees finished the year in positive territory, but only one kept pace with the growth seen in 2023. The C Fund grew almost 25%, finishing with a 12-month return of 24.96%, close to the previous year’s return of 26.25%. The S fund slipped by over 7% in the December, but still finished the calendar year with a solid annual return of 16.93%, but still almost 10% less than the 2023 spike of 25.30% seen the prior 12 months. The I-Fund, which did undergo a change in its underlying index throughout the year, dropped from 18.83% in 2023 to just 4.27% the following 12 months. The F fund was the lowest performing investment, growing 1.33% in 2024, down from 5.58%. And the last core TSP investment, the G fund, was the only fund to fare slightly better than 2023, growing 4.4% last year and 4.22% the previous year.
2024 Retirement and Investment Report Card for Thrift Saving Plan
Investment knowledge and experience with the markets are both essential when forming a solid wealth management strategy for feds to maximize their benefits. Here at PlanWell Financial, we have decades of experience working with federal employees and have obtained a wealth of knowledge to help you achieve your financial objectives. With that being said, the below chart shows what grades we give for each investment fund regarding last year’s performance, along with the rates of return for the year and previous month.
| Fund | 2024 Return | Dec. 2024 Monthly Return | Grade | Notes |
| C | +24.96% | -2.29% | A | Tracking the S&P 500, the C fund nearly matched the 26.25% growth it experienced in 2023. |
| S | +16.93% | -7.05% | A- | A rough final month impacted the potential growth of this more volatile fund, which tracks the Dow Jones U.S. Completion Total Stock Market Index |
| I | +4.27% | -2.83% | C | This year saw the international option of the TSP gradually switch indices from the MSCI EAFE to the MSCI ACWI IMI ex USA, ex China ex Hong Kong*. It’s difficult to tell how much this hampered or helped the I fund’s growth for the previous 12 months. |
| F | +1.33% | -1.71% | C | C for “could’ve been worse.” Because of the inverted relationship between stocks and bonds, the fixed income fund fared relatively as expected with domestic stock prices trending up throughout the year. |
| G | +4.40% | +0.36% | B | The “Government Securities” fund, available exclusively in the federal employment benefits package, saw decent growth in 2024, slightly beating the 4.22% return of the previous 12 months. |
*For more information, check out this article about the I-Fund switching its underlying index.
TSP Strategies for 2025 and In-Plan Roth Conversion on the Horizon
2025 TSP Strategies for Federal Financial Planning Needs
The TSP is a vital component of federal retirement planning, complementing other federal benefits such as the FERS pension and Social Security. By integrating their entire financial picture into a cohesive strategy, federal employees can create investment plans that align with individual financial goals and retirement timelines. A fed-focused financial plan, developed on one’s own or with the help of advisory services, can help federal retirees ultimately boost their take home pay after they have worked for the government.
To optimize TSP fund performance, federal employees should adopt a strategic approach to their investments. Diversifying across different TSP funds can mitigate risks and enhance returns. Regularly reviewing and adjusting your investment plan based on market conditions and personal financial goals is crucial. Additionally, taking advantage of catch-up contributions if you’re over 50 can significantly boost your retirement savings.
Talk with a CERTIFIED FINANCIAL PLANNER™ who Specializes in Helping Federal Employees Retire
Role of a Financial Planner for Federal Employees
A financial planner can be instrumental in helping to manage your TSP investments. These professionals provide expert advice on fund selection, risk management, and long-term financial planning. A certified financial planner (CFP®) can help federal employees navigate the complexities of TSP and ensure that their investment strategies align with their retirement goals. By working with a financial planner, federal employees can make informed decisions that enhance their TSP fund performance and overall financial well-being. Here at PlanWell, our understanding of federal benefits sets us apart from the rest as we can examine your broader federal picture -factoring in taxes, social security, your CSRS or FERS retirement benefits, long term care insurance, FEGLI, and FEHB – to help put a plan together that really makes the federal employee benefits package into one of the best benefits packages around. In other words, A CFP® can help federal employees integrate their TSP with other retirement benefits, ensuring a holistic approach to financial security. This guidance can be invaluable in setting and achieving financial goals for a robust retirement plan, and we serve all federal workers in assisting with their federal employee retirement needs, even if you’re not a “TSP millionaire.” Even new federal employees can take advantage of our many financial services for achieving personal retirement goals.
Coming Soon: In-Plan Roth Conversions
One thing to keep an eye for regarding financial planning for federal retirement benefits is the in-plan Roth conversion option that will be available starting January 2026 (less than a year away). This would allow TSP participants to take pre-tax dollars from their traditional retirement accounts and convert them into their Roth TSP account (from which there are no taxes upon withdrawal). This process would incur taxes for the year of the conversion, however, and the IRS bill cannot be paid with money from the Thrift Savings Plan. Deciding when and if a Roth conversion is right for your benefits and retirement plan is where having advisory relationships with a fiduciary financial planner who specializes in federal benefits can be a gamechanger and help prevent costly missteps, like a larger than expected tax bill.
Key Considerations: Planning for Retirement in 2025
Retirement planning for federal employees doesn’t need to be a complicated process. If you work for a federal agency and are approaching retirement, regardless of your retirement system, here are some solid first first steps you can take to start realizing your retirement as a reality – and possibly help maximize future retirement income, too.
Check our our free FERS Webinar – hosted by a Chartered Federal Employee Benefits Consultant (ChFEBC℠)
Estimate your future income from the FERS pension or TSP Withdrawals with our federal retirement calculators
How Can Webinars and Planning Services Enhance Federal Retirement Strategies?
Staying Updated with Federal Retirement Experts
Staying updated with insights from federal retirement experts is crucial for effective retirement planning. These experts provide valuable information on changes in federal employee retirement benefits, TSP fund performance, and retirement strategies. By following their advice and attending relevant webinars and workshops, federal employees can ensure that their retirement plans remain aligned with current trends and regulations. This proactive approach is key to achieving long-term financial security and peace of mind in retirement.
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.
