For both the previous month and the previous 12-month period, the C, S, F, and I funds all had positive performance while the F Fund’s value dropped
After a strong October for the three TSP stock funds C, S, and I, November ended on a negative note, with each of the three stock funds falling for the month. However, all three stock funds are holding onto gains for the year to date ending on November 30, 2021. On the bond side, the F fund was slightly positive for the month, reversing a trend of three consecutive months in negative territory. The G fund which has no market volatility, was positive at 0.13 for the second month in a row. Low interest rates will likely keep the G fund in this range for the foreseeable future.
Inflation continues to be problematic as the global economy strives to get back to its pre-pandemic conditions of low unemployment and stable global growth. The Federal Reserve is widely expected to begin tapering its bond purchasing program as early as December 2021. This program has been credited for providing immense liquidity to the economy during the COVID crisis, but is now being blamed by some for enhancing the current inflationary environment. Speculation continues to swirl as to when the Fed will begin to raise interest rates. Financial markets dislike uncertainty, current market volatility can certainly be attributed at some level to the uncertainty around the next steps and timeline of the Federal Reserve.
Performance figures for the month of November 2021 have been posted on the TSP website. The best performer for the month was the F fund at 0.30%, while the S fund was the worst for the month, at -5.03%. Monthly and year to date returns for 2021 are shown below. (source, TSP.gov)
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| Last 12 months | 1.33% | -1.01% | 27.89% | 19.90% | 10.97% |
| 2021 YTD | 1.26% | -1.14% | 23.16% | 11.80% | 6.04% |
| 2021 Monthly | |||||
| November | 0.13% | 0.30% | -0.69% | -5.03% | -4.66% |
| October | 0.13% | -0.04% | 7.00% | 5.43% | 2.46% |
| September | 0.11% | -0.86% | -4.65% | -4.00% | -2.81% |
| August | 0.11% | -0.18% | 3.03% | 2.00% | 1.76% |
| July | 0.13% | 1.15% | 2.37% | -1.24% | 0.72% |
| June | 0.12% | 0.74% | 2.33% | 3.46% | -1.44% |
| May | 0.13% | 0.34% | 0.69% | -0.66% | 3.61% |
| April | 0.13% | 0.82% | 5.33% | 4.23% | 3.09% |
| March | 0.11% | -1.23% | 4.38% | -0.39% | 2.35% |
| February | 0.08% | -1.45% | 2.76% | 5.21% | 2.26% |
| January | 0.07% | -0.71% | -1.01% | 2.85% | -1.09% |
Month to month trends as shown above are interesting, but it is important to remember that short term market volatility is to be expected and employees should not be making investment decisions based on short term performance. Following are longer term rates of return for each fund, as of November, 2021. (source, TSP.gov).
| Year | G Fund | F Fund | C Fund | S Fund | I Fund |
| 1 year | 1.33% | -1.01% | 27.89% | 19.90% | 10.97% |
| 3 Year | 1.57% | 5.56% | 20.33% | 18.99% | 10.17% |
| 5 year | 1.98% | 3.76% | 17.86% | 15.55% | 9.55% |
| 10 year | 1.94% | 3.26% | 16.18% | 14.98% | 7.62% |
| Inception Date | 4/1/1987 | 1/29/1988 | 1/29/1988 | 5/1/2001 | 5/1/2001 |
The TSP is a critical part of an employee’s retirement plan. The IRS recently released the 2022 contribution limits for TSP participants, increasing the maximum contribution for those under age 50 to $20,500 annually. In addition, those employees over age 50 can contribute an additional $6500 in 2022 for a maximum contribution of $27,000. If an employee over age 50 wishes to maximize their 2022 contribution they should increase their contribution to $1039 per pay prior to December 18, 2021. Employees under age 50 should contribute $789 per pay to maximize their contribution for 2022. Another important consideration is the use of Roth versus Traditional TSP. Our advisors are happy to discuss the pros and cons of both plans with employees. Please feel free to make an appointment for a complimentary consultation via the Serving Those Who Serve website.
Please reach out to us with questions and follow our website for the most recent updates. We also run a monthly TSP webinar focused on education and presented by federal benefits expert, Ed Zurndorfer. Here is a link to our upcoming webinars.
**Written by Jennifer Meyer, Financial Planner. The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jennifer Meyer and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **
***The Thrift Savings Plan (TSP) is a retirement savings and investment plan for Federal employees and members of the uniformed services, including the Ready Reserve. The TSP is a defined contribution plan, meaning that the retirement income you receive from your TSP account will depend on how much you (and your agency or service, if you’re eligible to receive agency or service contributions) put into your account during your working years and the earnings accumulated over that time. The Federal Retirement Thrift Investment Board (FRTIB) administers the TSP.***
