The TSP Funds

You can invest the money in your Thrift Savings Plan in 5 different TSP funds.

Each fund has a different investment goal. And some funds are 'riskier' than others. This offers you a choice in how to invest your TSP account money.

TSP Funds are on Autopilot

But even though Barclay's handles the money - you could say the funds are really on autopilot. Unlike some mutual funds, there is not a person or team of people managing the TSP funds to get the highest return.

The funds are designed to mimic a specific financial index. The goal of each fund is *not* to make the most money. Instead the goal of each fund is to make the same return as a certain index.

The exception to this is the G Fund... we'll talk about that more in a minute.

First - here are the five different funds:

• G Fund – Government Securities Investment Fund

  The G Fund is invested in special short-term U.S. Government Securities. This is the only TSP fund that is not linked directly to an index. The objective of the G Fund is to maintain a higher return than inflation without exposing the fund to risk of default or changes in market prices.




• F Fund – Fixed Income Index Investment Fund

  The F fund is designed to provide a greater return than money markets in the long-germ. The intention of the F Fund is to mirror the performance of the Barclays Capital U.S. Aggregate Index, a broad index of the U.S. bond market.




• C Fund – Common Stock Index Investment Fund

  The C fund is designed to invest in large and medium sized companies to offer TSP participants a chance at a higher return in the long run. This fund invests in common stock, which is the ownership of publicly traded companies. The C Fund is intended to match the performance of the S&P 500 Index.

  The C Fund is invested in the Barclays Equity Index Fund, which holds all the stocksincluded in the S&P 500 in virtually the same weights that they have in the index. Companies that make up the S&P 500 are large companies, companies comparable in size to General Electric, Lowe's, or Home Depot.




• S Fund – Small-Cap Stock Index Investment Fund

  The S Fund is designed to match the performance of the Wilshire 4500 Index, which is made up of U.S. companies not included in the S&P 500 Index.

  The S Fund is invested in the Barclays Extended Market Index Fund. Unlike the C fund, which owns shares in all 500 companies in the S&P 500 Index, the S Fund does not hold every single stock included in the index. Instead, it holds stocks of most of the companies in the index with market values greater than $1 billion.




• I Fund – International Stock Index Investment Fund

  The I Fund offers the opportunity to earn potentially high rates of return by investing in international companies. This Fund is invested in the Barclays EAFE Index Fund, which holds common stocks of all the companies represented in the Morgan Stanley Capital International EAFE (Europe, Australasia,Far East) Index. The Barclays EAFE Index has holdings in 21 different developed countries. The I fund is also affected by changes in the value of the U.S. dollar compared to other currencies.

Lifecycle Funds = Blend of the 5 Funds

The L funds are made up of differing amounts of the 5 TSP funds depending on when you expect to need the money.

There are 5 different L Funds:

• L-Income
• L-2010
• L-2020
• L-2030
• L-2040

L-Income is designed for people who need their money now and in the very near future.

The other L Funds are designed for people expecting to need their money about 5 years before or after the target year.

For example, L-2020 is designed for people planning on using their money between 2015 and 2024.

The L funds will change their allocation as you approach the target year.

What's the Best TSP Allocation?

That depends on...

• How long before you’ll need the money
• How much risk you feel comfortable taking
• Which sectors you think will be the most profitable in the future

The L Funds were designed to help take some of the guesswork out of TSP investing. But they are designed to help a very broad range of people.

Consider this; the L-2020 fund is designed for people retiring between 2015 and 2024. There are potentially hundreds of thousands of Federal Employees who fit into that category. Do you think all of them have the same needs, goals, and loss tolerances?

This is a situation where it makes sense to have a financial professional review your situation and make personalized recommendations for you.

The TSP is only a part of your retirement portfolio, it’s important that you consider all of your assets when making investment decisions.

Which Funds are Right for Me?

If you're looking for someone to help you get the most out of your Federal benefits and help you manage your personal and retirement finances - consider finding a financial planner who is also experienced in Federal benefits.

Learn more about how a Federal Retirement Planner can help you.

Won’t HR Tell Me Which Federal Retirement Choices are Best for Me?

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I’ve helped many Federal Employees retire successfully – so I’ve seen the problems that come up, but I also know how to fix them. While I can still help Federal Employees get out of these mistakes – I’d rather help you avoid these mistakes all together.

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Return from TSP Funds to Thrift Savings Plan