Is the TSP G fund safe? (2024)

Is the TSP G fund safe?

The G Fund is invested in U.S. Treasury securities specially issued to the TSP. Payment of principal and interest is guaranteed by the U.S. government. Thus, there is no “credit risk.”

Is TSP G fund a good investment?

Long-Term Rates and Short-Term Security

The way the interest rate is calculated on the G Fund, along with investing in short-term maturities, gives TSP investors the advantage receiving longer-term rates. In plain English, you get a very good deal the rest of America's investors do not get. Short-term notes are safer.

Is the G fund safe from recession?

A protected account is an investment account that can grow but cannot lose money. The G Fund (the G stands for Government Securities) is the only account in the TSP that is a protected account. It's a popular choice since your money is safe from market downturns.

What is the safest investment in TSP?

The G Fund is often considered the safest option among TSP funds.

What is the best performing fund in the TSP?

The C Fund has grown 7.49% in 2024, marking the best performance among the TSP's core funds.

What is the most aggressive TSP fund?

But to summarize that article, the 5 core funds can be broken down into conservative and aggressive funds. The conservative funds are the G and F funds and the aggressive funds are the C, S, and I funds.

What happens to G fund when interest rates rise?

Also, when interest rates rise, the G Fund rate will rise right along with them — again, without the loss of principal that you would experience in the F Fund under the same circ*mstances. From this perspective, as far as bond funds go, the G Fund is still a better deal than just about anything else out there.

What happens to the G fund if the government defaults?

As a G Fund investor, you should know that if the Treasury takes this action, your investment is always protected, and your G Fund earnings are fully guaranteed by law under the Thrift Savings Plan Investment Act of 1987.

Should I have any money in the G fund?

The G-fund can be an incredible tool but is rarely the best option for your entire portfolio. Because everyone's situation is different, the best portfolio is invested in the mix of funds that matches your stage of life and financial situation, but almost always should include some stocks.

What is the average TSP balance at retirement?

To compare, the average 401(k) balance based on 4.9 million defined contribution retirement plans was $112,572 at the end of 2022, according to Vanguard's 2023 analysis. To compare more accurately, at the end of 2022, the average TSP balance for a FERS employee was $157,325.

How to retire a millionaire with TSP?

What is the monthly return on the TSP G fund?

Thrift Savings Plan G Fund Monthly Returns is at 0.38%, compared to 0.33% last month and 0.35% last year. This is higher than the long term average of 0.37%.

Is TSP better than 401K?

A TSP and 401K are similar, but they have their distinct differences, too. If you are a Federal Government employee, a TSP is the better choice. It has lower fees, higher matching, and there are still many ways to customize it how you'd like with investments and withdrawal options.

What does Dave Ramsey recommend for TSP?

Dave Ramsey's advice is to save 5% into the TSP to get the full match, then max out a Roth IRA, and then put more into the TSP if you are able to save more after that.

What is the most conservative TSP fund?

However, the L Income Fund is the most conservative of the L Funds. It focuses on money preservation while providing a small exposure to the riskier funds (C, S, and I Funds) in order to reduce inflation's effect on your purchasing power.

Is TSP or Roth better?

The primary difference between Roth and traditional TSPs is how they're taxed. Specifically, a traditional TSP is better if you want to leverage your account to decrease your current income taxes and pay for withdrawals during retirement.

How many TSP investors are millionaires?

As of year-end 2023 just under 117,000 TSP investors had $1 million or more in their accounts, an increase of some 40,000 during the year, another impact of the rebound in stock-based investment funds during the year making up for their losses of 2022.

How many TSP millionaires are there?

According to the latest figures from the Federal Retirement Thrift Investment Board (FRTIB), the agency that oversees the Thrift Savings Plan (TSP), there are now 116,827 TSP millionaires as of the end of December 31, 2023. At the end of 2022, there were 76,889, which is a 52% increase in one year.

Why is the TSP F fund losing money?

But the G Fund does not, the F fund does. It's down because the Federal Reserve has been raising interest rates. But those bonds, you know, even the corporate bonds, it doesn't mean they're not going to pay off. And it certainly doesn't mean that they're not paying interest, which they continue to do.

Why is the G fund so low?

But the decline in G Fund returns is not because the government has gotten stingy, it is a combination of historically lower inflation and interest rates. For example, if you were to get a mortgage back in 1990, you would have an interest rate of around 10%!

Is the TSP not doing well?

The vast majority of offerings in the 401(k)-style Thrift Savings Plan did not have a good month in December—or a good year in 2022 for that matter. The S Fund, invested in small and mid-sized businesses, had the worst performance for December, losing 6.55%. It was down 26.26% for 2022.

Is the TSP G fund FDIC insured?

Even the G Fund (which invests in government securities) isn't protected by the FDIC. But under federal law, the payment of G Fund principal and interest is guaranteed by the U.S. government.

What is the safest place for money if the government defaults?

Savings accounts are a safe place to keep your money because all deposits made by consumers are guaranteed by the FDIC for bank accounts or the NCUA for credit union accounts. Certificates of deposit (CDs) issued by banks and credit unions also carry deposit insurance.

What is the alternative to the G fund?

The G Fund invests in special non-marketable U.S. Treasury government securities issued by the U.S. government for the TSP. So, the suggestion here is to use Short-Term Treasury index funds. But these are not guaranteed, so an alternative is to get a CD with a comparable interest rate of 1-2 percent.

What is the TSP G fund based on?

The G Fund rate is calculated by the U.S. Treasury as the weighted average yield of approximately 191 U.S. Treasury securities on the last day of the previous month. The yield of the security has a weight in the G Fund rate calculation based on the amount outstanding.