A late-November stock-market rally helped deliver a boost to Thrift Savings Plan (TSP) performance in 2025, underscoring how strategic fund allocation can impact retirement outcomes. Federal employees with assets in the stock-based funds saw notable gains, while those in conservative funds experienced steady but smaller returns.
G Fund:
0.34% November
4.08% YTD
4.46% 12 Month
F Fund:
0.64% November
7.49% YTD
5.65% 12 Month
C Fund:
0.24% November
17.78% YTD
14.96% 12 Month
S Fund:
-0.45% November
11.97% YTD
4.08% 12 Month
I Fund
0.42% November
28.54% YTD24.91% 12 Month
The TSP offers several core funds, plus Lifecycle (L) funds that blend investments based on your target retirement date. The three stock-based core funds — C, S, and I — track broad market indexes:
- C Fund invests in U.S. large- and mid-cap companies by mirroring the S&P 500.
- S Fund focuses on U.S. small- and mid-cap stocks outside the S&P 500, tracking the Dow Jones U.S. Completion Total Stock Market Index.
- I Fund targets international companies in developed markets outside the U.S. and Canada, following the MSCI ACWI IMI ex China ex Hong Kong Index.
These funds’ performance directly correlates with stock market trends, meaning market rallies translate into portfolio gains. The other core funds, F (bonds) and G (government securities), offer more modest, stable returns, while L Funds provide a diversified mix that gradually shifts toward conservative investments as retirement nears.
The I Fund led the pack, benefiting from robust international stock-market performance, while the C Fund reflected strength among large U.S. companies. The S Fund also delivered double-digit YTD gains, though with slightly higher volatility typical of smaller-cap stocks.
This recent surge highlights a few important points for federal employees planning retirement:
Equity exposure can pay off. Years like 2025 show how stock-based allocations can generate significant growth, especially over the long term.
Diversification remains essential. While stock funds outperformed this year, combining equities with fixed-income and government securities helps balance growth and risk.
Time in the market matters. Long-term investors who maintain a consistent allocation tend to benefit more than those attempting to time market fluctuations.
Review your TSP allocation. Strong performance in some funds may prompt a review of whether your current mix aligns with your goals, risk tolerance, and retirement horizon.
2025’s rally is a timely reminder that your TSP allocation can dramatically influence retirement outcomes. Federal employees should consider how stock exposure, diversification, and long-term strategy fit into their broader retirement plan. With careful planning, attention to market trends, and the help of a Federal Retirement Consultant (FRC®), you can help ensure your TSP works as hard as you do.
