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good day everyone or good evening
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depending on when you happen to be
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watching this my name is Ian Smith with
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fedsmith.com I wanted to go over with
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you today some figures put out by the
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federal retirement Thrift investment
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board or F frtib for short that just
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came out today and the F frtib puts out
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a lot of data on the Thrift Savings Plan
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the tsp the F frtib if you're not
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familiar with it is the federal agency
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that's test with managing and overseeing
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the Thrift Savings Plan this first table
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is total tsp plan assets and also all of
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these figures by the way are as of the
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end of January 2025 unless otherwise
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stated as you can see the tsp is quickly
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approaching a trillion dollars in Assets
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Now out of all the assets only about 7%
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of it is invested in Roth and just for
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comparison to this table at the end of
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2023 tsp assets were 849 billion and
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Roth assets were 55 billion and looking
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back to 2014 tsp assets at that time
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were 418 billion so in the span of
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roughly a decade the assets have
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approximately doubled give or take more
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than doubled really this next table
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shows the total number of accounts and
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average balances the vast majority of
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accounts are under Furs the federal
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employees retirement system that's not a
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shock Furs has been around a long time
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it's the current active retirement
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system the Civil Service retirement
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system csrs went out in the 1980s and
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again you see the Roth and traditional
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balance discrepancy here out of over 7
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million accounts almost 4.2 million I
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guess are under ferred but then out of
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those number of accounts only about 27%
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are under WTH if you're not familiar
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with the Roth versus traditional the
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basic difference is that with
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traditional tsp contributions you get a
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tax deduction on the money when you put
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it in it goes in before taxes the
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trade-off is that when you get to
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retirement and withdraw the money you're
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taxed on it at that time off money on
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the other hand goes in after taxes and
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when you get to retirement you withdraw
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the money you're not taxed on it again
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that's the tradeoff during that time if
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it's a long period of time the growth on
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the the account will presumably be a lot
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and so it has a potential to save you a
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lot in taxes assuming it's invested well
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depending on your situation of course
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also a side note about Roth the tsp
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announced back in November that inpl
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Roth conversions are coming in 2026 an
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often criticized feature about the tsp
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or lack of a feature I I should say is
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that it does not allow in plan Roth
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conversions asset allocation
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history here's why this one's
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interesting look at this graphic as you
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can see what these are these are lines
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showing the historical participant asset
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allocation in other words how tsp
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participants have allocated their funds
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or their Investments within the tsp
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funds the orange line is the G fund the
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green line is the C fund we're in the
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middle of a strong bull market that
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started late in 2022 roughly the end of
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October notice the Divergence in those
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two lines as we've gotten closer to the
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present what's going on here is people
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are putting more money into the C fund
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as the bull market goes on that's the
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trend and conversely more money is
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coming out of the GF fund at the same
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time now in the scheme of the total
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assets of the tsp and I showed you those
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figures earlier it's not a huge
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difference but it's an
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interesting Trend if especially if you
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look at it over a longer period of time
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Ralph Smith is another one of the
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fedsmith authors and he's researched
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this in more deta detail and if you take
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a look at this table that he put
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together since the end of
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2022 138 billion dollars has been moved
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into the C fund and 12.3 billion has
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come out of the G fund here's why I
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found this of interest and why it's
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potentially significant what these
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Trends show is that to some degree
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people are chasing returns in the market
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when the Market's up as it has been for
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the last couple of years people put more
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money into the C fund the stock funds
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when the Market's down or going down
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more money goes into the G fund because
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it's the safest most secure fund the
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problem with that is research and data
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have shown over time that timing the
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stock market is basically impossible
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because in order to win at doing that
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you have to do it twice the odds are
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already against you but having to do it
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twice that's even harder and what I mean
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by that is you have to know when to sell
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and when to buy or vice versa even
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professional investors can't do that
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most of the time monthly inter fund
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transfers this graphic is for January it
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surprised me also because the trend I
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was just talking about this pattern
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completely bucks that Trend so make of
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1.5 billion roughly came or excuse me
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went into the G fund and 263 million
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came out of the C fund the reason that's
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interesting is because in January the
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market was up so what we normally see is
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that when the Market's up money flows
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into the C fund and the the other stock
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funds more than the G fund so this is
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completely opposite of that and even
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more money came out of the I fund in
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December it was the opposite I don't
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have these figures here on the screen
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but just so you're aware of them about
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1.4 billion was transferred out of the G
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Fund in December and 1.17 billion went
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into the CF fund just for comparison I
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thought these figures on the tsp were
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interesting I hope you did too I hope
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you found them useful and we're almost
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at the end of February and that means
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that the monthly tsp returns are going
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to be coming out so be sure to check
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fedsmith.com and our other website tspd
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datac center.com because we'll be
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posting them as soon as they're
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thank you for watching have a good day
