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The Thrift Savings Plan (TSP) is a retirement savings and investment plan for federal employees and members of the military. It has been one of the most popular retirement savings vehicles for government workers, but in recent months the TSP has seen a decline in its value. This has left many employees worried about the status of their retirement savings. In this article, we will explore the reasons behind the TSP’s decline and what it means for federal employees.
Market Volatility
The biggest reason behind the TSP’s decline is the current market volatility. The stock market has been unpredictable and unstable due to the COVID-19 pandemic and other economic factors. As a result, the value of the TSP’s primary investment fund, the C Fund, has dropped. The C Fund primarily invests in large US companies and has seen a decline in value due to the current economic climate.
Interest Rates
Another factor contributing to the TSP’s decline is the current low interest rates. The Federal Reserve has lowered interest rates in response to the pandemic and economic uncertainty which has, in turn, affected the TSP’s G Fund. The G Fund is the TSP’s safest investment option and is composed of short-term US Treasury securities. Due to the lower interest rates, the fund’s returns have decreased, leading to a drop in value.
Politics and Economic Policy
The TSP’s decline may also be attributed to the current political climate and economic policy. The 2020 presidential election, coupled with the proposed changes in tax policy and government spending, has resulted in uncertainty and instability in the markets. This has affected not only the TSP, but other retirement savings plans and investments as well.
What Can Employees Do?
For federal employees, this decline may be cause for concern, but there are steps that can be taken to mitigate the impact. First and foremost, employees should not panic and make hasty decisions regarding their TSP investments. It is important to remember that the TSP is a long-term investment and will likely recover from this dip in value. Secondly, employees may consider reviewing and adjusting their investment strategy to better match their risk tolerance and retirement goals. Consulting with a financial advisor or TSP specialist may help in making informed decisions about investment options.
Conclusion
In conclusion, the TSP’s recent decline in value is primarily due to market volatility, low interest rates, and the current political and economic climate. Federal employees should take caution in making any rash decisions about their TSP investments and instead consider reviewing and adjusting their investment strategy. While the decline may be concerning, the TSP is still a reliable and important retirement savings plan for federal employees.
I cant wait to take ALL of my money out of my TSP and put it into another program. I HATE TSP!
Doesn’t matter, most TSP accounts hacked and stolen by the fraudulent Dim administration. Check out the 4-6% they stole on the new website “update”. Clown show,
You can't have limitless growth this is a neoliberal fairy tale. What may have been true for the latest 40 years doesn't mean thats going to be reality in next 20 years. The USA is going down in importance and with global warming etc we may see the golden age may be over. I can't afford to play so I stay in G.
My TSP is dropping like everyone else's. I also have some money at Schwab; therefore I have a Schwab advisor I can talk to – he usually talks me off my cliff. In the middle of this current drop, I asked what he thought about moving my TSP funds to a safe parking space, the G fund. He advised, back in 2020, when the pandemic was in full force, he told his clients if they withdrew their money due to the current market drop, they'd regret it forever. I know this is right from personal experience – in 2008, before I had access to a financial advisor, I moved all my TSP to the G fund after taking losses – I basically locked in my losses – Then I missed out on the huge returns that followed after 2008. I am still kicking myself. Low markets are where we make our money. By low, sell high, don't look at it every day, keep to your strategy.
Just the video I needed
I am hurting right now; what is going on? OK, thanks. This video puts a great perspective on everything.
This guy is a clown. He has no idea what he's talking about. The market has been flat for decades at a time. Or worse. He's too young to have any real life experience. Moronic…..buy and hold in a bear market is foolish. Go ahead and lose money just to try to prove a point! You lose 25% you need 50% return just to get back to even.
Brace for impact. Most of the reports I see is the perfect storm in the last quarter.
Great video! The stock market is like a man walking upstairs while playing with a yo-yo. The yo-yo goes up and down, sure, but the trend is consistently higher.
“When you invest in the stock market, you’re betting on America.”
Warren Buffett
What is the best Fund to avoid losing money?
I don't know if this was a good idea since I plan to retire next year, but due to the current market, I reduced my contributions from 30% to 6%, and added more to my credit union money market account. I felt that I would just be throwing my money away if continued to contribute to C and S funds only to see it being taken away through constant losses these past months.
Luckily no one can sell with the new website where the history is gone, and no detail available.
Please if anyone reads this: this week and the next are going to be a DISASTER. There are a LOT OF UPDATES being done. Please be Patient. The representatives are just as stressed as you are and care about your well being. They KNOW People are frustrated. And they know your money is important to you. The stock market taking a NOSE DIVE this year was bad. Please be Patient they know it’s a LOT to take in
I started working at the USPS in 1987 and retired in 2020 with 1.25 million in my TSP.
100% C-Fund for the first 30 years, then 60/40, C-G.
My wife has another million or so invested similarly.
Through thick and thin, bulls and bears, we stayed invested.
We had a sure-fire way of handling bear markets. We didn't look at our statements.
From 2000 to 2004 we didn’t look at our balance once. Just kept investing.
Bulls and bears will always come and go. Just don't think you know when it'll happen.
If Warren Buffett claims not to know what direction the markets are heading, neither do you.
And neither do all the Joe Internets out there.
Keep the course.
I just started and I put everything in the G Fund. The depression is coming. I plan on waiting for the huge plunge I know is coming. After the collapse, I plan on slowly diversifying.
All markets are rigged. The govt taking back the TSP contribution portion. Thanks
Thank you for this! I'm still 20-30 years from retirement, but I'm determined to reach a million in my TSP by then. This market and my TSP figures have me in a panic on what to do.
Seems different this time with the administration purposely trying to destroy the economy. Doesn't seem natural
Saying the market goes up and down is too simplified. I went all G fund a couple of months ago also. I’m just now back to my all time high from about 8 months ago. Nothing points to a rebound given what we were witnessing over the last 2 years and counting. The younger people giving advice have very little perspective on long term history. They’ve grown up watching the market skyrocket. Remember it was just 6000 in 2008. They haven’t dealt with the type of govt we have now, the wars, the inflation, the expected shortages, the medical tyranny being exposed and shutdowns and lockdowns. They’ve never seen any of it. Can it be fixed? Yes. But not with the people in place now. Now is a time for preservation not growth. Especially if you’re nearing retirement and need cash soon. Good luck to all.
According to all my army marine and navy buds, nine of them have been made aware of their tsp being closed from them starting on the 26th of this month. Im no expert but if the market still churns regardless, might not be fun having to be stuck watching it
This is not good information for everyone. Way to general, and frankly bad advice.
I’ve retired. Since 2020 I’ve lived off my pension and the interest in my TSP. I begrudgingly transferred over half my TSP into a traditional IRA with a brokerage company. Since the volatility with the market I put my tsp balance in the L fund to keep the loss less. At least that was my assumption. In October I will get social security. My plan is to stop withdrawals from tsp and let it go through the market corrections. I also have an annuity. I haven’t started the annuity yet. I’m wondering if what I’m doing is a good plan.
Biden fcks up everything he touches!!!
From what I understand, monies in TSP cannot rebound very much in retirement because you are no longer making contributions. Even if you do not withdraw right away, if market drops, it is difficult, and slow to rebound????
I have a question about the FERS supplement SRS. If I understand correctly, the FERS supplement money comes from our social security entitlement? Does taking the supplement at MRA reduce the amount of social security money we would receive at age 62? Basically, is the FERS supplement just taking money away from the back of our social security and paying it to us early resulting in receiving a reduced amount at age 62?
Great video.. thank you
Like the show and the message, I learned from my investment podcast that on average the stock market makes a 5% correction 3x a year. It makes a 10% correction every 2 years. Just accept that and not worry about it. As you said, it's a long picture.
Take the Bill Gates quote with his interview with Katie. Didn't loose a penny when MicroSoft stock dropped in value. Katie could not understand and kept telling him he lost millions. Bill Gates reply was I have not lost a dime because I have not sold any of the MS stock, still own the same amount of stock in MS.
Retirement plans make me sick. I'm better off managing my own money. I feel sorry for those who depend on a retirement plan to live off of after 60. You should have created assets.
Dallen if stock market is at 100 and increases to 200 it's 100% gain; if it then goes back to 100 it's only a 50% lost. Is this correct?
EVEN UKRAINES MARKET IS DOING BETTER THAN THE C FUND
LGBTQ
ITS DROPPING BECAUSE OF BIDEN. ADMIT THE TRUTH
Your video sounds so much better with the dedicated microphone! Thanks for the great videos.
Lets Go Brandon!
If you plan to retire in 6 months to a year, STOP putting money into the C and S funds…..The fed will raise the interest rates and that's going to keep pushing them down. Put all of your money to the G fund. If ypou have money in the C and S, leave it there. But don't add more.
Curious – If INDEXSP: .INX is the C fund what are the funds called so they can be watched / looked at? Is there a list?
I've had all my TSP money in C & S since 2008 when I joined federal service. I believe in taking a little risk to get high gains. Great video. Thanks for the perspective.
I'm 10 months from retirement and I am also $60K down since Jan 2022. L2030 plan. I look at the downturn and know that I'm buying my shares on sale. I've been maxing out TSP and Catch up for 7 1/2 yrs. These are unrealized losses. Nothing is lost until one sells. When in doubt, zoom out!