Now that 2021 is officially in the books, we can start looking back at how some retirement plans performed over the course of the past year.
Always one of the earliest look-backs available comes from the federal government’s Thrift Savings Plan, the largest defined contribution plan in the world with more than six million participants and more than $735.2 billion in assets under management as of the end of 2020.
The Thrift Savings Plan, also known as the TSP, was introduced in 1986 as part of the Federal Employees’ Retirement System Act, created to give federal workers the opportunity to invest in a tax-advantaged account for retirement, similar to a 401k plan.
As of the end of the third quarter of 2021, there were 98,523 current and former federal workers with TSP account balances of a million dollars or more.
So how’d it go for TSP funds overall in 2021? According to the latest monthly returns released Monday, not too shabby for those invested in the C Fund, but pretty shabby for those in the F Fund:
The TSP’s C Fund increased 28.68% in 2021
• The C Fund (Common Stocks) increased 28.68% in 2021, after reversing a -0.69% loss in November to a 4.48% gain in December. By comparison, the benchmark S&P 500 index closed out 2021 with a gain of 26.9%, or a total return of 28.7% including dividends.
• The small- and mid-size businesses in the S Fund grew 12.45% in 2021 after a 0.58% increase last month (and a -5.03% loss in November).
• The I Fund (International) increased 11.45% in 2021, capped off with December growth of 5.1%.
• The G Fund, made up of government securities, grew a modest 1.38% in 2021 with 0.12% growth in December.
• The F Fund, made up of fixed income bonds, lost 1.46% in 2021 after dropping 0.32% last month. It was the only TSP portfolio to finish the year in the red.
Among the TSP’s Lifecycle funds—which like target-date funds shift toward more stable investments as participants get closer to retirement—2021 saw gains across the board with the biggest gains reserved for those with the longest time horizons.
• L Income Fund grew 5.42% in 2021
• L 2025 grew 9.75% in 2021
• L 2030 grew 12.37% in 2021
• L 2035 grew 13.43% in 2021
• L 2040 grew 14.51% in 2021
• L 2045 grew 15.4% in 2021
• L 2050 grew 16.34% in 2021
• L 2055, L 2060 and L2065 all grew 19.9% in 2021
SEE ALSO:
• TSP Core Funds Show Strong Gains in 2020, Thanks to Remarkable Year for S Fund