Despite an increase in account holders and continuous new investments, the average account balance for TSP investors in the CSRS and FERS systems is down by nearly $30,000 as of September, and the program’s overall return on investment is down by roughly $120 billion.
According to the information given at the most recent monthly meeting of the TSP board, the average balance for those covered by FERS at the end of September was $150,744 compared to $181,279, and for those covered by CSRS, it was $168,756 compared to $195,424.
The overall account balance dropped to slightly under $690 billion in September for the first time since December 2020. That was down from just under $812 billion at the end of 2021. The number of account holders has increased from slightly over 6.5 million to 6.7 million so far this year.
These two funds have essentially switched places in investors’ portfolios as a result of a combination of common stock C Fund investment losses and investors moving to the safety of the government securities G Fund, which continued in September with a net transfer of $3.7 billion into that fund.
At year-end 2021, the C Fund had 40.3% of investments, and the G Fund 33.3%, including their interests in the lifecycle L funds, up from 35.2% and 42% currently.
The September Numbers
The S&P 500 typically declined by approximately 1% in September, which is a dismal month for equities. However, in September, the S&P 500 declined by more than 9%, making it the worst September since it declined by 11% in 2002.
Even if the markets have had a positive start to October, September was not a month to remember.
All but one TSP fund lost ground in September, continuing a pattern from August. The typically cautious G Fund witnessed a slight increase of 0.28%, increasing its return for the year to date to 2.34%.
The S Fund’s small-cap stock index experienced the biggest decline in September, falling -9.91%. S Fund shares decreased from $64.17 at the beginning of the month to $58.53 at the end.
According to the Federal News Network, the S Fund had a challenging year last year. A year ago, the fund ended September at $82.86 per share, representing a 29.36% decline since then (and a 29.85% decline for the year).
The foreign-focused I Fund experienced a 9.40% fall, bringing this year’s total decline to 27.25%. The C Fund’s common equities dropped 9.21% in September, down 23.87% for 2022. The fixed income F Fund lost 4.31% in August, bringing its yearly loss to 14.30%.
The TSP’s Lifecycle Funds, which resemble target-date funds, decreased in September. The L Income Fund, down 6% for the year, saw the smallest decline, losing 2.33%. The highest declines, totaling 9.29%, were seen in the L 2055, 2060, and 2065 funds.
All of these losses contribute to the losses experienced by these accounts, and experts hope that the next few months will bring better results.
Contact Information:
Email: [email protected]
Phone: 9143022300
Bio:
My name is Kevin Wirth and I have worked in the financial services industry for many years and I specialize in life insurance and retirement planning for individuals and small business owners, with a specialty in working with Federal Employees. I am also AHIP certified to work with individuals on their Medicare planning. You can contact me by e-mail or phone. I look forward to the opportunity of working with you on these most relevant areas of financial planning.
[email protected]
914-302-2300
Disclosure:
These articles are intended for educational purposes only. Please contact your advisors for legal, accounting or investment advice.
