The strong stock market returns of November helped boost the average value of a TSP account by some $10,000, and meanwhile investors overall moved money into those funds and out of more conservative funds, the TSP has said.
Figures released at this week’s monthly board meeting show that an average account value at the end of November for a FERS investor of $160,301 and for a CSRS investor $171,361, up from $150,221 and $162,191, respectively. Total account balances across all investors—including military and separated persons—stood at $691 billion, up by nearly $47 billion.
During the month, investors moved a net of some $1.8 billion out of the government securities G and bond F funds, most of it going into the small company stock S fund and most of the rest going into the lifecycle L funds collectively. That continued an overall shift toward more aggressive investing starting in the spring as markets recovered from their early-year drop—when investors overall had become more conservative in response.
Forty-five percent of participants now have money in at least one L fund, and 28 percent have all of their accounts in at least one of those funds.
Meanwhile, the TSP said that just above 100,000 account holders took advantage of loosened in-service withdrawal rules under the CARES Act, waiving the normal tax penalty for such withdrawals before age 59 ½, for withdrawals related to the pandemic. That provision has now expired.
The G Fund is Underperforming Inflation
If TSP investors leave money in the G Fund, it is guaranteed not to lose money nominally, but slowly chips away at purchasing power at current rates. On the other hand, if they invest heavily in the equity funds, they have more upside exposure, but also a lot more volatility risk.