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