Tag: tsp funds

tsp funds

tsp funds are the funds involved in the Thrift Savings Plan which is one of the finest retirement plans available to the federal employees of the US.

Thrift Savings Plans Have Ended 2016 on a Positive Note

There is some good news for people who invest in TSP as thrift savings plans have ended 2016 on a positive note. The funds not only posted positive monthly numbers but it has also succeeded in attaining high yearly numbers. Though the performance of the funds took a hard hit due to developments like Brexit, but the performance of these funds is somewhat stable now.

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Figures Confirm that Thrift Savings Plans Have Ended 2016 on a Positive Note

The figures attained by TSP funds in December confirm that thrift savings plans have ended 2016 on a positive note. The S fund which invests in the small-cap stocks was the top performer of 2016 as it gave a yearly return of 16.85 percent to all the investors. In the month of December, it posted 1.81 percent, down from the 7.95 percent of November. The C Fund which invests in the renowned S&P 500 Index ended the year with a double-digit growth as it was 12.01 percent. It was 1.98 percent in December, again, down from 3.71 in the month of November.

The I fund that invests in the International stock index had a positive year return of 2.10 percent. Though it had negative numbers for many months, it still performed better than the low-reward and low-risk G fund that ended the year at 1.82 percent. It is pertinent to highlight that the G fund offered the lowest yearly return as compared to all the TSP funds.

The F fund which is a fixed-income index investment fund ended 2016 on the lower side as it had just 2.91 percent return. But it succeeded in posting a higher return of 0.16 percent in December in December as compared to November (-2.35 percent). The L Income fund ended the year at 3.58 percent while all other lifecycle funds posted higher results. The L 2050 fund succeeded in posting the highest return of the bunch at 8.65 percent.

It can be seen clearly that though the December returns are not too high than the November’s returns, they are far better than the figures in October when only G fund succeeded in posting a positive return.

A Set-Back

Though the thrift savings plans have ended 2016 on a positive note, many of the participants had not expected it especially during the time of the Brexit referendum as at that time the investors withdrew $2.1 billion from I, S and C funds that are stock-indexed.

TSP Numbers Are Better Again

When the Thrift Savings Plan (TSP) numbers were in a bad shape in the beginning of 2016, most people did not expect them to improve too soon. The numbers were positive in the month of March and now the latest data reveals that they are positive again. Most of the funds are still in negative figures but there have been slight improvements in the funds when compared to the March data.

The Biggest Gainer of the TSP Data

Some good news for the TSP investors is that many funds had posted best monthly funds of the year. So their investment is yielding some results. The I Fund has got the biggest monthly return in the month of April. The fund which invests in international stocks got a return of 1.89 percent. However, the fund remains in the negative when its 12 months performance is analyzed. It stands at -9.94 percent.

The Poor Performer

The S Fund was 1.73 percent in the month of April. It has seen a downslide as it was 8.24 percent in March. The S Fund invests in small-cap stocks and it is also in the negative. It is at -8.53 percent in the last 12 months.

The Unaffected Performer

G Funds hardly showed any change. The fund that invests in U.S. government bonds was 0.15 in March. It is now 0.14 percent in April. The slight change of the fund is not a new thing. It is the only fund that has been the lease affected in the last 12 months. Its 12-month figure is 2.05 percent.

The Biggest Loser

The C Fund which invests in common stocks of the 500 companies in the Standard & Poor’s 500 had a sizeable difference. It was 6.69 percent in the month of March. It is now 0.39 percent in April. It’s currently at 1.29 percent for the past 12 months.

The Improved Fund

The fixed income index investment fund, known as the F Fund is at 0.41 in the month of April when compared to the 0.93 percent in the month of March. It has improved in the last 12 months. It went from 2.35 percent to 3.05 percent.

The Overall Performance

The overall performance of all the TSP funds, when compared on a 12-month period has been negative with the exception of the L Fund. It is the only fund that has seen some improvement during that timeframe.

TSP Funds Show Positivity in March 2016

The TSP funds, which are a preferred retirement saving option of the federal employees has been far too close to the red line. The investors have been waiting for some good news since last 3 consecutive months. The hope of the investors proved to be right when TSP funds became positive in the month of March. All the funds saw an increase for the month of March but the growth of the funds in the year 2016 was not positive for all the funds.

Details of the TSP Funds Growth

All the TSP offerings grew in the last month. The S fund grew to 8.24%. This fund is mostly invested in the stocks of mid-sized or small companies. Unfortunately, the growth was not able to erase the damage done in the past few months and it was down by 0.7% for the year 2016.

The C fund that includes all the common stocks saw a growth of 6.79%. It was up by 1.37% for the year. International stocks also gained 6.59% in March and yet they were down by 2.24% for the year 2016.

The F fund gained a very low boost during the last month when compared to its peers. It was just up by 0.93%. The growth of this fund for the year has been 3.13%. This fund has only the fixed income bonds. The G fund that implies government securities fund was the fund that achieved the lowest growth. It grew by just 0.15% in March which took its overall growth till now to just 0.49%.

L Funds Proved to be the Constant Positive

The L funds had a good growth too. This fund is designed to help move the investors to a portfolio that is slightly less risky. The L Income which is meant for people who have already started with the process of withdrawing their money saw a growth of 1.53% in March. Other L funds also grew slightly. L 2050 saw a growth of 5.94%. L 2040 grew by 5.25%. L 2030 had a growth of 4.54%. L 2020 grew by 3.35%.

A good thing for the TSP investors who have invested in the L funds is that all the L funds have managed to stay in the black till date for this year. L income growth has been 0.62% till date. L 2050 grew by 0.15% till now. L 2040 has grown by 0.3%. L 2030 saw an increase of 0.39% and L 2020 of 0.47%.

How Do TSP Investments Compare? by Paul Kalra

Paul Kalra Paul Kalra is a financial planner and federal retirement expert in Lake Forest, California.

TSP Investment Advice from Paul Kalra

Despite the roller coaster stock market over the past few years, it seems that, on average, the account balances in the TSP (Thrift Savings Plan) appear to be going up. The participants who assumed more risk – or at least those who seemed to do so – by going with the S and I funds, attained a return of just under 5% for the first half of 2015. And, those who stuck it out with a bit more volatility in foreign stocks were rewarded with just under a 6.5% return during the same time frame.1

By almost year-end 2015, FERS held an average balance of nearly $117,000 in their TSP plan, with an average Roth account balance for these same individuals of just over $7,100.2 If you are a CSRS employee, the average was closer to just under $119,000 in the TSP plan, with a Roth balance of just a tad over $11,500.3

How is the Money Distributed?

In terms of where the funds are being distributed by TSP plan holders, there seems to be a larger percentage of allocation being placed in both the G Fund and the C Fund, at 35% and 28% respectively.4

The remainder of the TSP fund balances sort out as follows (as of November 2015):

  • L Funds – 17%
  • F Fund – 5%
  • I Fund – 5%
  • S Fund – 10%5

Tracking Your TSP Investments

If you have money invested in the Thrift Savings Plan and you want to see how you’re doing – or even if you just want to check a hypothetical example – Check out the Thrift Savings Plan official page for information on TSP Fund prices and historical performance.

More about Paul Kalra, CFP, ChFC, CLU:

Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.

In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.

Making the Most of TSP Contributions by Paul Kalra

Thrift Savings Plan (TSP) Advice from Paul Kalra

Paul Kalra Paul Kalra, CFP, ChFC, CLU

If you are a FERS (Federal Employees Retirement System) employee who contributes to the TSP (Thrift Savings Plan) each year, there are some important things to know when it comes to making your contributions. This is because maxing out your deposits too early in the year could actually put you at risk of losing some of your matching contributions.

Each year, the government can contribute up to 5% of your salary to the TSP plan in a number of different ways. These include:

  • Agency automatic 1% contributions
  • Dollar-for-dollar contributions (on the first 3% of pay that you contribute)
  • 50 cents on the dollar (on the next 2% of pay that you contribute)

While it is a good strategy to obtain as much of the employer matching as possible, because there is an annual limit on TSP plan contributions, by “maxing out” your annual contributions too early in the year, employer matching contributions can be lost by not making any deposits after the plan has met its annual contribution limit.

Things to Consider

When it comes to making your annual TSP contributions, there are several important factors to consider. For example, you need to be aware of when you actually reach you annual contribution limit for the year. This is because when this limit has been reached, your employee contributions into the plan must be suspended for the rest of the year. In fact, the TSP system won’t even allow any contribution by an employee to be processed if it will cause the total amount of deposits for that year to exceed the annual limitation.

In addition, if you have reached your annual contribution limit prior to year-end – and further deposits have been suspended – this also means that agency matching contributions will also be suspended. This is because these contributions are based on the amount of contribution that an employee makes into the TSP in each pay period. Therefore, if you aren’t making any contributions, then there won’t be anything to match.

It is important to note, however, that if you are a FERS employee, your agency is still required to make an automatic 1% contribution – even if your employee contribution and agency matching contribution has been suspended.

More about Paul Kalra, CFP, ChFC, CLU:

Paul Kalra has been providing financial services for over 25 years to doctors, business owners and others nearing or in retirement. After a successful career with John Hancock Financial Services,in 2002, Mr. Kalra founded his own firm, Signature America Financial Planning Services, Inc. in Lake Forest, CA.

In his practice as a financial planner, Paul Kalra has found that when people are nearing their retirement years, they are faced with confounding decisions about their retirement plans, 401(k)’s, IRA’s, Social Security, Medicare, life insurance, wealth-preservation and estate planning. What motivated him to focus his practice on helping people in their 50’s and 60’s was when Mr. Kalra began facing such decisions himself and realized that the answers would have been very tough if he were not a financial planner.

Why should every young person rely on TSP?

TSP which is better known as Thrift Savings Plan is a long-term retirement plan that helps you to retire in comfort. As a part of this scheme, you are allowed to invest a certain amount of money from your individual funds (F, G, I, C and S) and get it back when you retire. You also have the option of choosing whether you want to pay tax on the money you are investing now or you can choose to pay it when you finally withdraw it from the amount.

Choosing TSP at a Young Age – Wise or Foolish?

If you are wondering that why anyone should choose TSP at a young age, then here’s a list of reasons that may be useful.

  • Saves You from Stress– The first reason is quite obvious. If you invest in a good investment plan now, you will not have to worry about your finances a lot. The money you are investing in this scheme would always be there to help you when you are old and need money for your day to day expenses.
  • Career Liberty– When you invest in this plan, you would have the liberty to choose any career path you might like. There will be no restrictions on staying to only a single career path with this scheme. So, no pressure of keeping your job will be there. If keeping a job or straight career path has become tougher for you in the current global economic conditions, it’s the right time to think of an investment plan like this.
  • Low Costs: This scheme is also very low cost. The TSP C fund charges only a fee of 29 cents per 1000 dollars invested by you. People who are not too fond of investment schemes that have an exorbitant fee should opt for this scheme. Young people should especially be fond of the low fee because when you are young, the fee may not matter much but when you get old, you will be proud of your decision of saving every penny.

To conclude, it can be said that TSP is really useful for young people as it provides many benefits with low risks. If you are willing to explore more about this plan, you should take help of an expert before deciding the amount of money you can invest so that your financial position stays comfortable. After all, it’s not wise to live too scarcely in exchange for enjoying the financial benefits at the time of retirement, is it?

For TSP investors, the Stable G fund was in the lead in 2015

Thrift Savings Plan TSP

The SI or the stable investment fund or the Government securities fund ( G Fund) is considered the most conservative choice for all the investors out there because it normally has the best returns and 2015 was no different for it.

G fund had the best returns:

Specifically, the G fund gained around 2.04 percent for the whole year while other funds that were linked to bond and stock indexes normally saw a lot of ups and downs for all the 401 (k) style program (for military and federal employees) investors.

We all are aware of the fact that the G fund is indeed the largest of the offerings made by TSP and it held around 35 percent of the 463 billion dollars that were on investment at the end of November last year; the month past which we don’t know anything.

The G fund is invested in a variety of government securities that make yield returns that are identical to those made by mid length government bonds. The reason why the losses don’t increases as the interest rates rise for it is the specific way the investments are made. The risk of enduring loss with respect to principal is considerably low.

After G fund came the C fund, which is also known as the common stock fund; it gained around 1.46 percent in 2015. The fund is responsible for tracking the S&P’s 500 index of all the large US firms, was responsible for holding around 28 percent of all the investor assets through and till the end of November.

The trends are estimated to be similar once we examine the results after the end of 2016 but if the interest rates go further up, we might have to see some deviations in the charts come the end of another fiscal year.

Is TSP liable to give investment advice

Is TSP liable to give investment advice

tsp funds

TSP has around 4.7 million members from all over the country and currently the administrators are discussing whether they should be offering investment advice to their members or not.

TSP to offer investment advice?

This was not announced publicly but was made public knowledge via a report that has been released on the 2015 Conference on Aging. It’s mentioned specifically that the Thrift Investment board is actually making the consideration whether they should provide personalized advice for investments or not.

TSP being the country’s biggest retirement plan (401(k) type) with around 454 billion asset money hasn’t got any real program via which they provide their members aid in choosing the right path while making investments and putting money in to the various TSP funds.

The closest TSP gets to giving advice is in the Lifecycle funds program. The TSP website lists the following paragraph about it: “We use professionally determined investment mixes that are tailored to meet investment objectives based on various time horizons. The objective is to strike an optimal balance between the expected risk and return associated with each fund,”

The board believes that one of the main reason retirees withdraw from their TSP accounts to put money elsewhere is that they are not guided enough. Many surveys done in the recent past have also indicated this lack of guidance to being a big reason why members don’t believe in TSP.

All things considered, we definitely believe that the TSP members require some sort of guidance from their fund managers about investments because this is something of substance and when there’s money involved everybody needs to be absolutely sure. In this regard, an executive order to offer formal guidance could be around the corner and we hope that for the benefit of the majority, it does get implemented soon.

TSP benchmarking and the advantages

Thrift Savings Plan TSP

The majority of the index funds (almost all) that are available through the TSP always make an attempt to duplicate a given index’s returns. An example of this is the S&P 500. There are some advantages associated with these funds; some are listed below.

Benefits of TSP benchmarking:

  1. Low costs: The biggest advantage in this regard could be that the index funds don’t cost much majorly because they don’t require the team to do much research. The higher the expense ratio of a fund goes, the better its performance is to provide a break-even with a fund that costs less.
  2. A low turnover: All the large cap indexes where there are very few alterations made, managers rarely sell stocks and buy other because they don’t feel the need. High turnover affects the performance badly because it encompasses all the trading costs.
  3. Low tax: If you have a high turnover providing fund, then you might be able to get good taxable gains. But, the better part is that the funds with low turnover generally end up being very tax efficient.
  4. Asset class exposure: If you invest in an index fund, you are surely going to get the return of the specific asset class. Take the S&P 500 index for example; if the large cap stocks perform good, then you are of course going to get a good return.

This indexing is not only limited to specific funds but it also provides some good benefits in the lifecycle funds.

The G fund is a different one and it isn’t one that fluctuates everyday with respect to the market but provides a fixed return monthly that’s also often loved by employees.

 

Why TSP Is The Way To Go

Diversification:

Thrift Savings Plan TSP

Thrift Savings Plan aka TSP is just like a 401 (k) but one that the government overlooks for all the federal employees out there. IT has had many supporters over the years but that doesn’t in any way mean that there haven’t been people who have opposed it throughout its existence and execution tenure. The plan, all things considered is something of substance, doesn’t have much fee and it’s the perfect fit for people who want to save but don’t like the hassle that the other ordinary savings plan possess. Because it’s tax-free for most of the military personnel, it’s also a great option for them. Let’s take a look at why exactly it’s what you might be in need of:

  1. Diversification:

TSP has a total of five index funds and this is not inclusive of the date funds that are responsible for setting the allocation and the maintenance of balance. To some people, the plan doesn’t allow exciting investing options but it’s anything but true. Through it, you can get your hands on a lot of government bonds, the MSCI EAFE index and even the S&P 50.

  1. Low Fees:

Nothing can come close to being as good as Thrift Savings plan when it comes to the costs of investment. The C fund has the ratio of expense set to 0.029 percent and that’s the lowest percentage. All the other index funds are no different.

  1. Roth option for IRA:

For all the civilians, the Roth plans are responsible for the successful enabling of tax free withdrawals and after tax investments. In 2012, the Roth feature was added to all the TSP accounts.

When you look at it this way, nothing comes close to being as good as TSP and that’s the major reason why there have always been many new applicants for the program.

 

How TSP Funds Can Be The Financial Benefit You Need

How TSP funds can be the financial benefit you need

Urban pointed out that one of the best motivations to leave your cash in the TSP funds, is the low managerial costs, which depend on the extent of your record equalization. For instance, the G Fund’s cost proportion for 2014 was .029 percent. In this manner, on the off chance that you put resources into the TSP in 2014, your profits were lessened by 29 cents for each $1,000 of your TSP funds. This is much lower than most private plans.

In the event that you apply for a TSP funds before you resign (or separate) and pick not to reimburse the advance equalization after you leave benefit, this does not count as a detriment to the one-time post-partition halfway dispersion. In any case, you ought to likewise realize this will postpone the time that it takes to choose a post-partition withdrawal. The TSP will hold up 90 days after partition to check whether you are going to pay back the advance. At the end of the day, a retiree can’t choose another TSP conveyance for 90 to 120 days (the time it takes the organization to send the detachment notification to the Thrift and the 90 day window for reimbursing the advance with an individual check).Although this methodology may postpone your next post-division withdrawal, it can be an approach to get the utilization of some of your TSP funds preceding your retirement; in spite of the fact that this will be an asses sable dispersion if you pick not to reimburse the advance.

Know about duty punishments on the off chance that you isolate before the year in which you achieve age 55 or on the off chance that you isolate before the year in which you came to age 50 on the off chance that you resigned under extraordinary procurement for open security officers (law requirement officers, fire contenders or air movement controllers). Isolating in the year you turn age 55 or later is a special case to the 10 percent punishment charge in the event that you choose regularly scheduled installments or a halfway appropriation specifically from the TSP.

On June 29, President Obama marked the Defending Public Safety Employees’ Retirement Act. This corrects the Internal Revenue Code to permit determined government law implementation officers, traditions and fringe assurance officers, elected firefighters, and air movement controllers who separate from administration in or after the year they turn age 50 to make a withdrawal from the TSP funds without bringing about a 10 percent early withdrawal punishment. The TSP is right now checking on the law and how it applies to the TSP records of open well being officers. They hope to distribute data on www.tsp.gov ahead of time of the law’s viable date of Dec. 31, 2015.

To make sure that you are qualified to pull back cash from the TSP funds after you have left government administration, it is suggested that you contact the Thrift Line to see whether the TSP has gotten your “partition notice” from your organization (and that any unpaid advance equalization have been finished). At the point when calling the Thrift Line (1-877-968-3778), press #3 to identify with the operator directly.
 

Positive TSP Funds During November

tsp fundsTSP funds receive returns at the end of each month and not often do we see almost positive returns on all the funds of the plan. The thrift savings plan (surprisingly so too) saw all but two of its funds see positive returns during the month of November. This was in accordance to the Thrift Investment board of the federal retirees.

The fixed income bonds’ fund did see a slight fall and went down 0.25 percent during the last month. The international stocks also saw a slight decrease of 0.89 percent. This is a bit startling when you consider the latter received a 7.07 percent gain during the month of October.

Positive TSP funds!

The common stocks of the C fund saw a 0.31 percent increase in November and the S fund’s small and mediocrely sized companies also saw a handsome 1.75 percent rise in the last month. This was the best of all the rises in the Thrift savings’ plan’s offerings in the month of November.

The steady G fund of the TSP funds that is concerned with the securities of the government also saw a 0.17 growth in percentage and this is the same as the growth it saw during the month of October. This is a bit surprising because it was expected to see a bit more rise than it ended up seeing.

The lifecycle offerings which allow the investors to make the movements to portfolios that are less risky (As they approach retirement) also saw some excellent returns during the month of November. They also grew during October.

These excellent returns aren’t going to go unaccounted for and are going to mean a lot more registrations in the schemes as well. Here’s hoping that this continues for the months to come too and we get to see these quality rises every month.

TSP Funds Positive in November

Investors can breathe a sigh of relief. TSP funds stayed in the positive for a second month in a row. The end of October saw a powerful upward surge in the TSP funds. While most of the Thrift Savings plans showed lower numbers at the end of November (compared to October), they stayed mostly in the positive.

Two TSP Funds Still Negative

Only two TSP funds ended the month with negative numbers. The F fund closed out November down .24 percent and the I-fund ended the month down .86 percent. While the month-end numbers were in the negative, the F fun (fixed income index) has a positive year-to-date posting and a positive 12-month posting.

The I fund (international stocks) showed a negative return of -2.64 percent over the last 12 months and a positive 1.55 percent year-to-date posting. The L fund has been of particular importance over the last several months as new federal employees will automatically contribute to this fund for instead of the government backed G-fund, unless they specifically request to contribute elsewhere. The new changes went into effect in September with the goal of helping diversify investments.

The L-Fund was up .17 percent in November and had a positive 2.13 percent year-to-date posting as well as a posting of a positive 2.09 percent for year to date.

While stock market returns have been disappointing over the last several months, the C fund has had relative success compared to the others. With a 3.08 percent return, it ranks higher than most other funds, though much lower than averages between 2012 and 2014. The S funds took the lead in November with an increase of 1.75 percent.

Federal Employees Shifting Money to Safer Funds

Unstable prices and values have encouraged federal employees and federal retirees to shift their money to other funds. This shift included the transfer of some $200 million into the G fund, $81 million to the F fund and $265 million to the L Funds.

In addition, most FERS employees maintain a TSP balance as well as a ROTH IRA balance. The number of federal employees with both a TSP balance and a Roth IRA is rising about 2 percent each month, with some $3.5 billion in assets coming from Roth IRAs. TSP investments are on the rise, with numbers up by over $460 million in October.

Only 5 percent of all TSP investments are in the I and F funds. With the G fund plays host to 36 percent and the C fund has 27 percent.

December, December

TSP funds investors are looking forward to December with mixed feelings. The S&P has had an average return of 1.59 percent in December for the last 60+ years. Despite increases over the last few months, financial experts do not expect any major increases in the funds through the rest of the year.

Subsequently, most financial experts suggest that federal investors may be let down by the stock investments for the year, mainly due to higher expectations. Many will be disappointed by the positive performance of the C TSP fund because it has performed far below levels seen in the last several years.

October Saw TSP Stock Funds Get Gains

Thrift Savings Plan (TSP)

TSP Stock Funds Get See Gains

Majority of the Thrift Savings plan funds saw huge rises in the preceding month of October. The fund that got the largest boost was the C fund. This was hugely unexpected but the commission that approved the change justified its decision and when you really look at it, it does have excellent effects for the federal employees in the longer term.

The C fund is based on the S&P 500 index. Specifically this index saw a whopping raise of 8.4 percent in the month of October. The index has not seen a higher raise in the past 4 years which is something really striking. One more surprising fact is that the C fund was actually able to even exceed its index rate and gained 8.46 percent for the month of October. This also means that the C fund is now going to be at 2.8 (round about) for the year and for the last 12 months it stands at 5.28 percent.

This gain in the C fund is something that’s going to be written in the history books. October 2011 saw the C fund gain around 11 percent and since then, no year saw the C fund get a raise this high.

Apart from the C fund, other smaller TSP stock funds also saw gains in the preceding month. The S fund, for instance increased by 5.612 percent but it’s still down for the whole year. These tinier funds play a more vital part to the domestic economy of the country and because of the fact that the economy is not getting rapid growth, there is expectedly less chances for these funds to gain growth in their revenue. That is the reason why they are behind the C fund by a substantial amount.

Other funds like the G fund also saw changes and this just goes to show the importance of the month of October in the domestic economic life of the country.

TSP Funds Wiped Out in August

tsp funds

Aside from a small amount of token resistance offered by the G Fund, other TSP funds ended the month of August with a net loss.

It was the crash in the Chinese stock markets in the latter half of the month that triggered the drop in the U.S. and global markets, with the linked TSP funds haplessly following the slide, and unable to recover lost ground in time before the end of the month.

The crash drove more money into bonds, reflecting the gain in the G fund that is invested into U.S. treasury bonds. The G Fund was up 0.18% for the month, up 1.33% year-to-date, and up 2.07% for the last 12 months. That’s relatively impressive and steady considering the series of global economic crisis that the stock markets have had to weather, but the gains are nothing to write home about.

Even the fixed-income bonds the F Fund is invested in could not save it from the slide, and the F Fund ended August with a 0.11% loss. It’s still up 0.68% for the year to date, and up 2.01% for the last 12 months.

China Stock Crash Drives TSP Funds Into the Red 

The C, S and I Funds, tied to the stock markets, ended August deeply in the red thanks to the stock crash in China. The S Fund dropped 5.80% for the month, wiping out the gains it provided to investors earlier this year and in the past 12 months. The S Fund is now down 1.24% for the year to date, and down 0.15% for the past 12 months.

The C Fund dropped 6.03% in August, and is now down 2.84% for the year to date. It’s still holding on to a small 0.55% gain for the past 12 months.

The biggest casualty of the China crash was the I Fund, which is invested in international stocks. The I Fund ended August down 7.36%, and it’s not down 7.23% for the past 12 months. It’s still holding on to a small 0.73% gain for the year to date.

All the L Funds, which are a mix of the other TSP Funds, likewise ended the month of August with a net loss.

TSP Funds Bullish in July

The (TSP) funds had a much better July after a rather lukewarm performance in June.

TSP

Four of the five TSP funds ended up with net gains for the month of July. The TSP C Fund led the way with a 2.1 percent gain, followed closely by the TSP I Fund with a 2.08 percent gain.

The TSP F Fund ended July up 0.74 percent, and the TSP G Fund squeaked through with a 0.19 percent gain. Only the TSP S Fund was down a small 0.12 percent.

Year-to-date, the top gainer was the TSP I Fund which showed an impressive gain of 8.73 percent. The TSP C Fund managed a YTD gain of 3.39 percent.

The TSP S Fund may have been the only one that lost momentum in July, but it still has a YTD gain of 4.83 percent, and it’s climbed a whopping 11.28 percent in the past 12 months. The TSP C Fund likewise has climbed 11.29 percent in the past 12 months, while the I Fund showed no net change in the last 12 months and is essentially still in the same place where it was.

TSP Funds Show Steady Growth For The Year

TSP fund investors looking for clues about which way the funds are heading and how fast should take a look at the markets and indices. For example, the C Fund is based on the S&P Index which has been pretty steady this year, relatively speaking.

The TSP G Fund, which was recently saved from legislation that would have reduced returns for investors, is likewise going steady with a 1.15 percent YTD gain.

If the trend continues and the stock markets and Congress don’t mess up, expect the TSP funds to continue showing steady but not stunning gains for the second half of the year and the entire year.

Other TSP Related Articles

Are You Thinking About a “Deferred” Retirement? by Gary Fouts

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TSP Board Approves Wider Investment, Withdrawal Options

Thrift Savings Plan

The Federal Retirement Thrift Investment Board, which administers the Thrift Savings Plan (TSP), has approved two major measures for investment and withdrawals.

The new changes will allow federal employees who are TSP investors a whole lot more flexibility in terms of what they can invest in, and how and when they can withdraw their TSP fund investments.

One measure will create an investment window through which TSP investors will be able to choose from a wide range of mutual funds to invest into.

The second measure will allow TSP investors to make multiple withdrawals after age 59 1/2; while still working without being hit with a tax penalty, and also after they are separated from federal employment.

Both of these changes to the Thrift Savings Plan are major issues, and it will take a year or more to be implemented, if at all. The investment window plan will additionally require Congress to pass legislation approving the change.

 Why is FRTIB Making These TSP Investment and Withdrawal Changes?

The Federal Retirement Thrift Investment Board has been studying these changes and their impact for some time now. The idea is to modernize the TSP so that plan investors don’t move their funds out to an IRA with more flexibility as soon as they leave federal employment. Currently, 41 percent of TSP investors who leave federal employment move their funds elsewhere within a year.

The idea of allowing investments into funds other than the five TSP funds is no doubt an attractive feature that will help stem the outflow. But the multiple withdrawals feature will be especially beneficial in helping retain TSP investments after federal retirement or separation.

Currently, federal employees above age 59 1/2; and those separated are allowed to make one partial withdrawal arrangement, and the second one after that must cover the entire remaining balance. If the TSP allowed multiple withdrawals without penalties, large numbers of federal retirees would leave their TSP savings untouched and benefit from the low fees.

Other TSP Related Articles

Are You Thinking About a “Deferred” Retirement? by Gary Fouts

Determining the True Cost of Waiting to Buy Back Military Benefits – by June Kirby

Military Retirement Plan Shift to Thrift Savings Plan System Would Benefit Blackrock

TSP Bill Allowing Employees to Withdraw Thrift Savings at Age 50

TSP G Fund Saved From Cuts in Senate Deal on Highway Bill

Thrift Savings Plan

The Thrift Savings Plan (TSP) G Fund has been saved from cuts intended to pay for $30 billion in spending in the highway bill.

Senate Majority Leader Mitch McConnell (R-KY) and Senator Barbara Boxer (D-CA), the Chairwoman of the Senate Committee on Environment and Public Works, announced a deal on legislation that will fund the Federal Highway Trust Fund for the next three years.

The revised legislation does not include cuts in the returns for investors from the TSP G Fund, as had been originally proposed in the bill. The House version of the bill has already dropped the idea to fund highway spending by dipping into the TSP G Fund.

Who Saved the TSP G Fund?

The 4.3 million TSP investors who are invested in the TSP G Fund were likely saved by a highly public campaign by federal employee and retire unions to dissuade the Senate from going ahead with this idea.

Unions including the National Active and Retired Federal Employees Association (NARFE), National Treasury Employees Union (NTEU) and others wrote letters to senators letting them know how badly this would impact millions of federal employees. Union members likewise bombarded their senators with thousands of phone calls and email messages.

Following the announcement of the deal which doesn’t include cuts to the TSP G Fund, NARFE President Richard G. Thissen said that “The Senate has soundly rejected this proposal, and this should be the last time such a proposal rears its ugly head.”

“The TSP belongs to the plan’s participants. It does not belong to the federal government, nor does it exist to pay for unrelated legislation, regardless of the worthiness or necessity of the legislation. I thank the thousands of NARFE members who made calls and sent emails to their senators on this issue. Your actions undoubtedly made an impact,” added Thissen.

As for the highway bill, it will now fund the Federal Highway Trust Fund only for three years, instead of the six years of funding included in the original bill. So the can of crumbling highways and bridges has essentially been kicked forward to the next Congress and President, and we’ll almost certainly be having this same discussion again at that time.

But at least for now, the Thrift Savings Plan’s G Fund has been saved from rate cuts, and that’s a big win for 4.3 million TSP investors.

Other TSP Related Articles

Are You Thinking About a “Deferred” Retirement? by ​Gary Fouts

Determining the True Cost of Waiting to Buy Back Military Benefits – by June Kirby

Military Retirement Plan Shift to Thrift Savings Plan System Would Benefit Blackrock

TSP Bill Allowing Employees to Withdraw Thrift Savings at Age 50

Federal Unions Protest Senate Proposal to Cut TSP G Fund Returns

TSP funds

The largest federal employee and retiree unions are up in arms over proposals being floated by Congress to fund a highway bill by cutting the returns for investors in the Thrift Savings Plan (TSP) G Fund.

All told, some $458.3 billion has been invested in the TSP funds (as of May 2015) by the 4.7 million TSP participants. Nearly 92 percent, or 4.3 million, are investors in the G fund, which has about $193 billion in assets.

One proposal being considered by the U.S. Senate would reduce the G Fund rate of return from the current rate of 2.25 percent to a meager 0.02 percent. Another proposal seeks to lower the rate of return by 10 percent.

The idea behind all such Congressional proposals is to make the returns for federal employees and retirees from the TSP funds more in line with what other investors receive in standard money market funds.

Obviously, this doesn’t go down very well with the millions of federal employees and retirees whose retirement benefits are very much tied to the Thrift Savings Plan. So the federal employee and retiree unions that represent them have begun an all-out assault against the proponents of these proposals in Congress.

Federal Unions Write to Senators About Proposed TSP G Fund Rate Reduction

National Active and Retired Federal Employees Association (NARFE) President Richard Thissen wrote to senators – “On behalf of the more than five million federal employees, retirees and their families represented by the National Active and Retired Federal Employees Association (NARFE), I write to draw your attention to reports of an attempt to raid the Thrift Savings Plan (TSP) to fund, at least in part, pending transportation legislation….

At a time when federal employees, retirees, job seekers, and their families are reeling from news that their most personal information and financial data has been compromised, it is unconscionable that this very constituency would be targeted for cuts to pay for completely unrelated legislation.”

The head of the National Treasury Employees Union (NTEU) likewise urged Congress to reject proposals to weaken the federal Thrift Saving Plan’s (TSP) G Fund.

NTEU National President Colleen M. Kelley’s letter to senators says that “Any change to the G Fund would send a signal to the federal employees, retirees, and military personnel that the Thrift Savings Plan is no longer free from manipulation.”

Kelley adds that “A federal employee needs the TSP to achieve a retirement income that is enough to live on. How can Congress change the rules that employees and retirees have relied on for decades in responsibly planning for their retirement in order to fund a highway bill?”

More TSP and Federal Retirement Related Articles

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Understanding The Thrift Savings Plan, By Todd Carmack