2024 Provides Positive Start for TSP Investors

L Fund investments are increasing in the TSP. CSRS participation is declining as these investors age. More federal employees now getting the full match.

Update on TSP Assets and Activity: CSRS Participants in TSP Declining

In 2023, the number of TSP participants using the full government match reached a new record. 86.8% of FERS (Federal Employee Retirement System) investors and 84.9% of BRS (Blended Retirement System) investors are taking advantage of the full government match.

Also, participation in the Roth investment program set a new record high, with 36% of participants now having a Roth balance.

The total assets in the Thrift Savings Plan are now at $845 billion. Roth assets totaled $54 billion at the end of December. For comparison, at the end of December 2023, total TSP assets were about $726 billion, and Roth accounts totaled just over $39 billion.

There are now 6,997,017 participants in the TSP. This includes over four million FERS employees and 1.3 million BRS participants. At the end of December 2022, there were 6,751,930 TSP participants.

While the number of other participant group members in the TSP is growing, the number of CSRS employees is declining. There are now 250,433 CSRS participants. At the end of December 2022, there were 264,345 CSRS participants.

In 2023, the number of age-based and hardship dollar withdrawals from the TSP increased to over $8.2 billion. In 2022, the amount of these withdrawals was about $7 billion.

TSP Investors Increased Allocation in Stock Funds in 2023

At the end of 2022, 33.1% of TSP participant allocation of funds was in the G Fund. 41.3% of participant assets were in the core stock Funds (C, S, and I Funds). This followed a dismal year for the stock market, and investors gradually moved money into the G Fund as the market declined.

In 2023, the market was volatile, but it rebounded in the last quarter and provided TSP investors with great returns.

As a result, TSP investors gradually moved money into the stock funds. At the end of December 2023, investor allocation in the stock funds totaled 45.6%. The total in the G Fund was 27.7%. Investment in the G Fund decreased as stock investments increased.

Here is the allocation for these funds at the end of December 2022 and December 2023.

FundDecember 2022December 2023Difference
C 28.9%32.0%3.1%
Data provided by FRTIB

The percentage change in the allocations was relatively small. The number of dollars this represents in a program with $845 billion in assets is still significant. In 2023, there was $234.1 billion in the G Fund. In December 2022, there was $240.1 billion in the G Fund.

$300.1 billion was in the TSP stock funds at the end of December 2022. At the end of December 2023, that figure grew to $385.3 billion.

TSP Performance in January 2024

While the year is only a few weeks old, the C Fund in the TSP has been good for investors with a positive return of 1.76%. The S and I Funds are both down for the month as seen in this chart.

The G Fund is up 0.24% and all of the Lifecycle Funds (L Funds) have a positive return. Each L Fund has an allocation of stocks and bonds. The funds with the longest projected retirement date have a higher allocation of stock funds.

G Fund0.24%
F Fund-1.08%
C Fund1.76%
S Fund-0.96%
I Fund-1.57%
L Income0.18%
L 20250.17%
L 20300.17%
L 20350.15%
L 20400.15%
L 20450.13%
L 20500.13%
L 20550.21%
L 20600.21%
L 20650.21%
Returns as of 1/22/2024 | Source: TSPDataCenter.com

How Lifecycle (L Funds) Are Structured for Federal Employee Retirement

Each of the ten L Funds offers a diversified mix of the G, F, C, S, and I Funds. The L Funds were designed to let TSP participants have an entire portfolio in a single L Fund.

Every quarter, the target allocations of all the L Funds except for the L Income Fund are automatically adjusted. They gradually shift from higher risk and reward to lower risk and reward as they approach their target dates. The L Funds adhere to their target allocations for a full quarter regardless of market performance.

Here is an example of the two extremes in the L Funds. The Fund with the lowest risk is the L 2025 Fund. Lower risk means a higher percentage of investments is in the bond funds. As of December 2023, here was the allocation of TSP Funds for the L 2025:

  • G Fund: 60.25%
  • F Fund: 5.90%
  • C Fund: 17.59%
  • S Fund: 4.41%
  • I Fund: 11.85%

At the other extreme is the Lifecycle Fund for those retiring about 2065. This fund carries more risk and also offers more rewards, as stock funds are more volatile (usually) than bond funds. As these employees have more years until their retirement, investing more in stock funds provides a greater potential reward for their retirement years.

Here is how the allocation is structured for the L 2065 Fund as of December 2023 according to the TSP.

  • G Fund: 0.38%
  • F Fund: 0.61%
  • C Fund: 50.78%
  • S Fund: 13.58%
  • I Fund: 34.65%

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47