For those managing their retirement savings through the Thrift Savings Plan (TSP), keeping track of performance is crucial, especially in fluctuating markets. September 2024 saw significant developments across all TSP funds, with many tracking above or below their respective benchmark indexes. In this article, we’ll discuss how TSP funds performed this past month, compare their returns to popular benchmarks, and explore which funds might be the best options moving forward for military personnel and federal employees looking to maximize their retirement savings. Understanding the funds, their benchmarks, and respective risk levels will help you determine which are your best TSP funds to invest in 2024.
What Is the Thrift Savings Plan (TSP)?
The TSP is a retirement savings plan available to federal employees and military service members. Offering both traditional and Roth options, the TSP is similar to a 401(k) but tailored specifically to federal personnel. The plan provides low-cost options across various asset classes, including U.S. stocks, international stocks, bonds, and government securities. One of the biggest advantages of TSP is its L (Lifecycle) Funds, which automatically adjust your allocation based on your retirement timeline.
September 2024 TSP Fund Performance Overview
Let’s dive into how each TSP fund performed in September 2024, comparing the returns to their benchmark indexes:
Fund | September 2024 Return | Benchmark Index Return |
L Income | 0.72% | |
L 2025 | 0.80% | |
L 2030 | 1.15% | |
L 2035 | 1.24% | |
L 2040 | 1.31% | |
L 2045 | 1.38% | |
L 2050 | 1.44% | |
L 2060 | 1.58% | |
G Fund | 0.33% | |
F Fund | 1.34% | 1.34% (U.S. Aggregate Bond Index) |
C Fund | 2.13% | 2.14% (S&P 500 Index) |
S Fund | 1.55% | 1.55% (Dow Jones U.S. Total Stock Market Index) |
I Fund | 0.77% | 1.16% (International Index) |
As you can see, most TSP funds provided positive returns in September 2024, with some exceeding their respective benchmarks, particularly the L Funds, which focus on a target retirement date.
Best TSP Funds to Invest in 2024: Top-Performing TSP Funds in September
L 2060 and L 2065 Funds
September Return: 1.58%
Comparison: These funds performed exceptionally well compared to their benchmarks. The L 2060 Fund significantly outperformed the U.S. Total Stock Market Index, making it an attractive option for younger federal employees with a long time until retirement.
C Fund
September Return: 2.13%
Benchmark: S&P 500 Index (2.14%)
The C Fund, which tracks the S&P 500 Index, continues to be a stellar performer. Although it slightly lagged behind the index, its close tracking of the market makes it a stable choice for long-term growth.
S Fund
September Return: 1.55%
Benchmark: Dow Jones U.S. Total Stock Market Index (1.55%)
The S Fund mirrors the Dow Jones U.S. Total Stock Market Index, and while the return this month was moderate, it aligns perfectly with its benchmark. This fund remains a solid option for those seeking diversification beyond large-cap stocks.
Underperforming TSP Funds
While most funds performed well, the I Fund slightly underperformed its benchmark index:
I Fund: The I Fund returned 0.77%, which lagged behind the International Index benchmark at 1.16%. With international markets facing greater volatility, this may account for the lower return.
Comparing TSP Fund Performance to the Broader Market
To put these TSP fund performances in perspective, the broader U.S. stock market saw gains in September 2024, driven by growth in tech stocks and continued consumer spending. The S&P 500 rose by 2.14%, closely matched by the C Fund at 2.13%. The Dow Jones U.S. Total Stock Market Index increased by 1.55%, aligned with the S Fund.
Bond markets, represented by the F Fund, also showed positive returns, reflecting stabilizing interest rates in the U.S. and global markets. The U.S. Aggregate Bond Index return of 1.34% was exactly mirrored by the F Fund, indicating the TSP's continued reliability for fixed-income investors.
Why TSP Funds Are a Smart Investment for Military and Federal Employees
The TSP is one of the most efficient retirement savings vehicles available to federal employees and military members, thanks to its low fees and diverse fund options. Whether you're more conservative and prefer the G Fund, which is government-backed and risk-free, or are seeking higher growth with the C Fund and S Fund, there's something for everyone.
Another option of the TSP is its automatic adjustment in L Funds, which gradually shift to safer investments as you near retirement. This feature is perfect for investors who prefer a hands-off approach but still want their portfolio managed with retirement in mind.
Wrapping Up: Maximizing TSP Benefits
As September 2024 has shown, TSP funds continue to perform strongly, and their returns generally align well with benchmark indexes. Whether you are an active military member, a veteran, or a federal employee, understanding your TSP fund options and staying updated on their performance is essential for securing a comfortable retirement.
If you haven't reviewed your TSP allocations recently, now might be a great time to do so.
Sources:
TSP Performance Overview: https://www.tsp.gov/funds-performance/
U.S. Bond Market Insights: https://www.bloomberg.com/markets/rates-bonds
International Index Data: https://www.msci.com/
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