Another bad month for the stock market translated to another bad month for the federal government’s 401k-like Thrift Savings Plan.
Every portfolio in the TSP finished July in the black, and the month marked the best single-month performance for the 401k-style retirement savings program since November 2020. But negative returns in August and September have added to what’s shaping up as a very rough year.
September is usually a bad month for stocks with the S&P 500 falling on average by about 1%, but this September it fell by more than 9%, making it the worst September since it fell by 11% in 2002.
While the markets are off to an encouraging start so far in October (with the Dow jumping 765 points, the S&P 500 up 2.6% and the NASDAQ up 2.3% on Monday and building on those gains as of midday Tuesday), it was not a September to remember.
All but one TSP fund lost ground in September, continuing a trend from August. The notoriously conservative government securities investment G Fund saw a modest 0.28% increase, bringing its gain so far this year to 2.34%.
The small cap stock index S Fund saw the largest drop at -9.91% in September. S Fund shares started the month at $64.17 and ended the month at $58.53. Federal News Network notes it has been a rough last 12 months for the S Fund, which a year ago ended the month of September at $82.86 per share, meaning a 29.36% drop since then (and down 29.85% for the year).
The I Fund made up of international stocks fell 9.40%, bringing its overall decline to 27.25% this year.
The common stocks of the C Fund fell 9.21% in September, and the fund is down 23.87% in 2022. The fixed income F Fund fell 4.31% last month and is down 14.30% for the year.
September also saw declines for all of the TSP’s target-date fund-like Lifecycle funds. The L Income Fund had the smallest drop, losing 2.33% (down 6% for the year). The L 2055, 2060 and 2065 funds saw the biggest drops, all going down 9.29%. For the year, all three of those funds are down 25.6%.
The L 2025 was down 3.98% in September (down 11.2% for the year); L 2030 down 5.85% (down 16.24% for the year); L 2035 down 6.44% (down 17.92% for the year); L 2040 down 7.01% (down 19.5% for the year); L 2045 down 7.50% (down 20.9% for the year); and L 2050 down 7.97% (down 22.18% for the year).
The TSP is the world’s largest defined contribution plan with more than 6.6 million participants.
SEE ALSO:
• TSP Millionaire Ranks Thinned by More Than One-Third
• Thrift Savings Plan Gets Much-Needed July Boost
• New Bill Calls for Oversight of Federal Retirement Thrift Investment Board
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
TSP’s TDFs outperformed the TDF Industry. It’s 2020 funds lost 17.6% vs TSP 11 and the 2030 Industry fund lost 20% vs TSP’s 16%