The Thrift Savings Plan (TSP) is a retirement savings plan for federal employees and members of the uniformed services. It offers several investment options, including government securities (G) fund, fixed income index investment (F) fund, common stock index investment (C) fund, small capitalization stock index investment (S) fund, international stock index investment (I) fund, and the L fund, which invests in a mix of the other funds based on the time horizon of the investor.
2022 was a tough year for TSP investors, with most of the funds posting negative returns for the year. However, the TSP performance bounced back in 2023, surprising some investors.
You may be surprised at the positive TSP performance in 2023 driven in part by the least popular TSP stock fund. While the C and S funds are usually the top performers, the I fund has been leading the pack in 2023, followed by the L fund. The G and F funds have also been performing well.
Most of the Thrift Savings Plan funds posted positive returns, bouncing back from a largely negative performance in February. All but one of the portfolios in the federal government's 401(k)-style retirement savings program ended the month in the green, with the I fund leading the way with a return of 4.47%.
The government securities (G) fund was the only offering in the retirement savings program that gained ground in 2022. It returned 1.61% for the year, while the other funds posted negative returns, ranging from -0.09% for the F fund to -26.09% for the I fund.
The 2022 TSP fund performance was dismal. One TSP stock fund was down 26%. However, history shows that after the last significant yearly loss, the stock market rebounded, and the TSP funds posted positive returns in the following years.
All but one Thrift Savings Plan fund showed negative returns in February, showing a setback after strong performance earlier in the year. The I fund was the only fund to post a positive return, with a gain of 0.91%. This was due to the weakening of the U.S. dollar and strong performance in international markets.
TSP performance is down in February 2023, but still up for the year-to-date. The C fund, S fund, and L fund are all up for the year, while the G and F funds are slightly down. One TSP management advisor sees a "growth recession" ahead, as the U.S. economy slows down and interest rates rise.
In conclusion, the TSP performance has been bouncing back in 2023, with most of the funds posting positive returns. While the I fund has been leading the way, the other funds have also been performing well. The TSP is a long-term investment, and investors should keep in mind the historical performance of the funds and the market trends when making investment decisions.