Is the I fund a good investment?
The I Fund can be useful in a portfolio that also contains stock funds that track other indexes such as the C Fund and the S Fund. By investing in all segments of the stock market (as opposed to just one), you reduce your exposure to market risk. The I Fund can also be useful in a portfolio that contains bonds.
Your investment in the TSP I Fund is subject to significant stock market risk (it will rise and fall during bull and bear markets). As can be seen from the performance charts and statistics above, the I Fund is more volatile (higher risk) than the C Fund or the S Fund.
Basic Info. Thrift Savings Plan I Fund Monthly Returns is at 3.36%, compared to 2.74% last month and 3.11% last year. This is higher than the long term average of 0.51%.
The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds.
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).
The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.
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.”
Age 40—three times annual salary. Age 45—four times annual salary. Age 50—five times annual salary. Age 55—six times annual salary.
Regular TSP
To make equal contributions over the course of the 2024 calendar year (for 26 pay periods), you should contribute $885 each pay period.
The TSP C-Fund which approximates the S&P 500, has had an average annual 12.29 percent gain between 1988 and 2020; the TSP F-Fund, a broad index representing the U.S. bond market, has had an average annual 6.29 percent from 1988 to 2020; and the G-fund, long term U.S. Treasury notes, has had an average annual of 4.70 ...
Can TSP make you a millionaire?
Be patient: Building wealth takes time and becoming a millionaire through the TSP will likely require a long-term perspective. Stay the course and continue saving and investing consistently, and you will increase your chances of reaching millionaire status.
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. To compare more accurately, at the end of 2022, the average TSP balance for a FERS employee was $157,325.
The primary difference between Roth and traditional TSPs is how they're taxed. Specifically, a traditional TSP is better if you want to leverage your account to decrease your current income taxes and pay for withdrawals during retirement.
| Thrift Savings Plan — December 2023 Returns | ||
|---|---|---|
| Fund | January 2024 | Last 12 Months |
| G fund | 0.34% | 4.23% |
| F fund | -0.19% | 2.06% |
| C fund | 1.68%% | 20.78% |
However, the L Income Fund is the most conservative of the L Funds. It focuses on money preservation while providing a small exposure to the riskier funds (C, S, and I Funds) in order to reduce inflation's effect on your purchasing power.
Thrift Savings Plan F Fund Monthly Returns is at 0.87%, compared to -1.41% last month and 2.55% last year. This is higher than the long term average of 0.44%.
As of year-end 2023 just under 117,000 TSP investors had $1 million or more in their accounts, an increase of some 40,000 during the year, another impact of the rebound in stock-based investment funds during the year making up for their losses of 2022.
TSP contributions and investing should be top of mind when you begin your federal career. An employee who earns 50,000 per year and contributes 2,500 dollars with a 2,500-dollar match from the government can reach the TSP millionaire dollar mark in 25-30 years by investing aggressively.
Advantages of your TSP account
Regardless of your retirement system, participating in the TSP can significantly increase your retirement income, and starting early is important. Contributing early gives the money in your account more time to increase in value through compound earnings.
The TSP offers six different investment funds, including the G, F, C, S, and I Funds, as well as L Funds. While there are some disadvantages to consider, such as the need to allocate at least 5% of salary to receive the maximum employer match, the benefits of participating in a TSP are numerous.
Is TSP better than 401K?
A TSP and 401K are similar, but they have their distinct differences, too. If you are a Federal Government employee, a TSP is the better choice. It has lower fees, higher matching, and there are still many ways to customize it how you'd like with investments and withdrawal options.
Your best bet is to stick with the C, S and I Funds. Here's the ratio we recommend for your portfolio: 80% in the C Fund, which is tied to the performance of the S&P 500. 10% in the S Fund, which includes stocks from small- to mid-sized companies that offer high risk and high return.
On average for a comfortable retirement, an individual will spend £43,100 a year, whilst the average couple in retirement spends £59,000 a year. This means if you retire at 55 with £300k, an individual will run out of funds in approximately 7 years, and a couple in 5 years. So, on paper, it doesn't look like enough.
Yes, it is possible to retire comfortably on $500k. This amount allows for an annual withdrawal of $20,000 from the age of 60 to 85, covering 25 years. If $20,000 a year, or $1,667 a month, meets your lifestyle needs, then $500k is enough for your retirement.
You may be starting to think about your retirement goals more seriously. By age 40, you should have saved a little over $185,000 if you're earning an average salary and follow the general guideline that you should have saved about three times your salary by that time.
