Is the I fund a good investment TSP?
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.
THE G FUND:
This gives the G Fund the best overall risk/reward ratio of any Treasury investment, and it's only available to TSP investors. More specifically, the G Fund interest rate is based on the average of U.S Treasuries with a duration of 4 years or more, and the interest rate resets monthly.
| TSP Investment Funds 8/31/1990 - 7/3/2024 | TSP G Fund | TSP I Fund |
|---|---|---|
| YTD Return | 2.25% | 7.39% |
| 1-Year Return | 4.53% | 13.38% |
| 3-Year Return | 3.39% | 3.66% |
| 5-Year Return | 2.54% | 6.88% |
You should consider investing in the L Income Fund if you were born before 1961, are currently withdrawing money from your TSP account, or you plan to begin withdrawing money this year. Am I ok with market and inflation risk? The L Income Fund can have periods of gain and loss, just as the individual TSP funds do.
I Fund benchmark index change in 2024 — As previously announced, the FRTIB Board will change the I Fund's benchmark index in 2024. This change will further diversify I Fund investments and give TSP participants access to more markets and companies.
The I Fund can also be useful in a portfolio that contains bonds. A retirement portfolio that contains a bond fund like the F Fund, along with other stock funds, like the C and S Funds, will tend to be less volatile than one that contains stock funds alone.
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.
By starting early, contributing regularly, investing in a diversified portfolio, taking advantage of catch-up contributions, and considering the impact of taxes, you can maximize your retirement savings and enjoy a comfortable retirement.
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.
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.
Should I keep money in TSP?
Many participants choose to keep their money in the TSP because of the TSP's low-cost funds. And you can always move money into your TSP account by making rollovers from eligible employer plans and from traditional IRAs. You always control how your money in the TSP is invested, even if you aren't making contributions.
To receive the maximum Agency or Service Matching Contributions, you must contribute 5% of your basic pay each pay period.
The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.
Thrift Savings Plan I Fund Monthly Returns is at 4.86%, compared to -3.17% last month and -4.01% last year. This is higher than the long term average of 0.52%.
by TurboTax• Updated 2 months ago
If you have a 401(k) or TSP through your employer, your contribution is reported in Box 12 of your W-2 with the letter code D. Because your contribution is included in your W-2, do not re-enter it in the retirement section.
Once you retire from federal service, you can no longer contribute to your TSP. However, that doesn't mean that your TSP won't continue to grow. You will benefit from compound interest, and you can still transfer retirement assets from other existing accounts, such as a 401(k) or IRA.
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.”
It may surprise some of you to learn that none of the money in your TSP account is insured by the Federal Deposit Insurance Corporation, like your bank deposits are. When you invest for retirement, you take on varying levels of risk, depending on how you allocate your investments.
If you are contributing less than 5% of your basic pay, you are missing out on free money. You can also elect to contribute more than 5% of your basic pay to your TSP account, as long as the contributions do not exceed the IRS deferral limit.
The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds. The small- and mid-size businesses of the S Fund posted the strongest numbers in February, gaining 6.03%. That's good enough to bring the fund 3.48% into the black in 2024.
What is the average TSP balance at retirement?
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.
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.
TSPs and 401(k) plans are alike in giving employees tax advantages over other approaches to saving for retirement. For federal employees, TSPs' automatic contributions, higher employer matches and low fees probably make them a superior choice.
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 ...
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.
