Illustration by OpenAI
Some good news for federal employees: TSP shows steady growth and healthy fund performance
The Thrift Savings Plan has surpassed $1 trillion in assets, providing steady returns in 2025.
There has been a lot to worry about for federal employees and their benefits in 2025, but one thing that has been doing very well is the Thrift Savings Plan! The TSP will continue its normal daily operations during the current lapse in appropriations. Visit tsp.gov/shutdown/ for additional information and updates.
As of the end of September, the year-to-date returns of the five core funds was:
- G Fund: 3.34%
- F Fund: 6.14%
- C Fund: 14.80%
- S Fund: 11.18%
- I Fund: 25.34%
Instead of investing in individual funds, you may be contributing your money to one of the Lifecycle Funds which combines the returns of the five core funds in a portfolio designed to meet the target date of the L Fund. The L Income Fund is designed to minimize risk for those who are taking distributions from their accounts and allows a portion of the balance to be invested in the C Fund (14.17%), S Fund (3.54%), and I Fund (9.54%) while most of the fund is invested in the G Fund (67.29%) with only 5.46% in the F Fund. Here’s how the Lifecycle Funds performed as of the end of September:
- L Income: 7.50%
- L 2030: 12.39%
- L 2035: 13.29%
- L 2040: 14.15%
- L 2045: 14.89%
- L 2050: 15.61%
- L 2055: 17.90%
- L 2060: 17.90%
The TSP has a balance of over $1,000,000,000,000! I could have said, “one trillion dollars,” but showing the 12 zeroes was much more impressive! Although there were 2,726,000 contributing FERS participants in the TSP as of June 30, there were 120,000 FERS employees who were not contributing anything to their TSP account and therefore only receiving one percent agency automatic contributions with no matching funds. As of the end of June there were 1,252,000 accounts active for separated FERS employees who did not close their TSP account.
In the latest minutes published by the Federal Retirement Thrift Investment Board, in fiscal year 2025, the TSP handled over four million participant and beneficiary-initiated transactions, answered over six million inquiries, mailed over eight million pieces of communications materials to participants, processed over 94 million participant contributions totaling approximately $35 billion, and managed a projected $966 billionin average assets for over seven million active and separated participants.
According to the Investment Company Institute, Defined Contribution Plans Americans held $13 trillion in all employer-based DC retirement plans on June 30, 2025, of which $9.3 trillion was held in 401(k) plans.
In addition to 401(k) plans, at the end of the second quarter, $780 billion was held in other private-sector DC plans, $1.5 trillion in 403(b) plans, $506 billion in 457 plans, and $1 trillion in the Federal Employees Retirement System’s Thrift Savings Plan. Mutual funds managed $5.7 trillion, or 62 percent, of assets held in 401(k) plans at the end of June 2025. With $3.5 trillion, equity funds were the most common type of funds held in 401(k) plans, followed by $1.5 trillion in hybrid funds, which include target date funds.
In addition, assets in individual retirement accounts (IRAs) totaled an additional $18.0 trillion at the end of the second quarter of 2025, an increase of 7.0 percent from the end of the first quarter of 2025.
Did you know that the TSP has one-hour recorded webinars? These recordings are a great way to learn about the TSP and its benefits, and they are always available. Select a recorded webinar from the list below to get started. For those of you who have recently retired or resigned (or may have been involuntarily separated), the TSP Distributions is one to watch along with reading through the TSP booklets Distributions and Tax Rules about TSP Payments to fully understand your options and their consequences.
There are other videos that you may wish to further educate yourself as you transition from your federal career, whether by plan or by surprise:
Earlier this year, Karen Schaeffer, CFP©, Michelle Singletary, Personal Finance Columnist at The Washington Post, and myself reviewed what happens to your health insurance, life insurance and other benefits if you lose your job or retire, how to avoid missteps with retirement decisions, including with Social Security, techniques for surviving without a paycheck, the appropriate use of debt, and the Thrift Savings Plan , including the pros and cons of withdrawals. Managing Your Finances in Uncertain Times: Resources for Federal Government Employee
The Securities and Exchange Commission and the Federal Retirement Thrift Investment Board developed a program titled “Your TSP Account – What to Think About When Nearing Retirement or Considering Leaving the Government.”
There is a webinar at 2 p.m. on Thurs., Oct. 9, 2025 “Investing Strategy/Education for Feds.” Registration can be found at the National Active and Retired Federal Employees’ Association’s Federal Benefits Institute.
NEXT STORY: TSP funds continue to tick upward in September