Why Is My TSP Losing Money - Fed Savvy (2024)

FAQs

Why Is My TSP Losing Money - Fed Savvy? ›

If the markets experience downturns or volatility, your TSP investments may lose value. Economic Factors: Economic factors such as inflation, interest rates, and geopolitical events can impact the performance of your TSP investments. Negative economic conditions can lead to losses.

There is a risk of loss if the Dow Jones U.S. Completion TSM Index declines in response to changes in overall economic conditions (market risk) or if S Fund investments do not outpace or grow enough to offset the reduction in purchasing power (inflation risk).

For all practical purposes, this makes TSP G Fund like a stable-value fund or a supercharged money market fund: Investors can generally expect the G Fund to never lose money and to pay a modest yield over time.

For TSP participants who are still working for the federal government or members of the uniformed services, an in-service withdrawal can have a serious impact on your ability to accumulate enough savings to support your future goals.

Total TSP assets at the end of 2023 were $845 billion. 4,060,009 FERS TSP accounts with an average account balance of $175,692. To compare, the average 401(k) balance based on 4.9 million defined contribution retirement plans was $112,572 at the end of 2022, according to Vanguard's 2023 analysis.

NASDAQ: TSP

TuSimple has received the notice because it failed to file its quarterly earnings report for the period that ended Sept. 30, 2022, as well as the annual report for the year that ended Dec. 31, 2022, in a timely manner.

If you choose to invest in the G Fund, you are placing a higher priority on the stability and preservation of your money than on the opportunity to potentially achieve greater long-term growth in your account through investment in the other TSP funds.

Thrift Savings Plan G Fund Monthly Returns is at 0.35%, compared to 0.39% last month and 0.35% last year. This is lower than the long term average of 0.37%.

In periods of falling interest rates, the F Fund will experience gains from the resulting rise in bond prices. So in the long run, you may expect F Fund returns to exceed those of the G Fund; however, you should also expect greater price volatility (up and down movements).

What not to do with your TSP account? ›

1. You are not contributing at least 5% If you aren't putting at least 5% of your income into your TSP, to maximize the matching contributions from your agency, you're turning down free money. You may already be at 5% and not know it.

Submit your withdrawal forms directly to the TSP Service Office. To reach the Service Office, call the TSP ThriftLine at 1-TSP-YOU-FRST (1-877-968-3778) or the TDD at 1-TSP-THRIFT5 (1-877-847-4385). Outside the U.S. and Canada, please call 1-504-255-8777.

You can keep your TSP account after you separate from federal service as long as you have a vested balance of $200 or more. Many participants choose to keep their money in the TSP because of the TSP's low-cost funds.

The 4% rule is a popular retirement withdrawal strategy that suggests retirees can safely withdraw the amount equal to 4% of their savings during the year they retire and then adjust for inflation each subsequent year for 30 years.

There is no such thing as too much money in the Thrift Savings Plan. If you want your TSP balance to be able to generate an inflation-indexed annual income of $10,000, most financial planners will suggest that you have a $250,000 balance at the time you retire.

The rule of 72 is a great way to estimate how long it will take for your TSP to double. This rule says that if you divide 72 by your average investment return then you'll get how many years it takes to double. For example, if on average you earn 10%/year then your money will take 7.2 years to double (72/10= 7.2).

Soon after the new system launched, TSP participants experienced a variety of issues with managing their account and completing transactions. These issues included the initial set up of the account, missing beneficiary data, completing rollover requests, and receiving required minimum distributions, among other things.

Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.

The G Fund is invested in U.S. Treasury securities specially issued to the TSP. Payment of principal and interest is guaranteed by the U.S. government. Thus, there is no “credit risk.”

If you're later in your working life than the people in the example and your TSP account isn't as large as you'd like, don't give up! In fact, it's more important than ever to start or continue making contributions and to contribute as much as you can.