good day everyone or good evening
depending on when you happen to be
watching this my name is Ian Smith with
fedsmith.com I wanted to go over with
you today some figures put out by the
federal retirement Thrift investment
board or F frtib for short that just
came out today and the F frtib puts out
a lot of data on the Thrift Savings Plan
the tsp the F frtib if you're not
familiar with it is the federal agency
that's test with managing and overseeing
the Thrift Savings Plan this first table
is total tsp plan assets and also all of
these figures by the way are as of the
end of January 2025 unless otherwise
stated as you can see the tsp is quickly
approaching a trillion dollars in Assets
Now out of all the assets only about 7%
of it is invested in Roth and just for
comparison to this table at the end of
December
2023 tsp assets were 849 billion and
Roth assets were 55 billion and looking
back to 2014 tsp assets at that time
were 418 billion so in the span of
roughly a decade the assets have
approximately doubled give or take more
than doubled really this next table
shows the total number of accounts and
average balances the vast majority of
accounts are under Furs the federal
employees retirement system that's not a
shock Furs has been around a long time
it's the current active retirement
system the Civil Service retirement
system csrs went out in the 1980s and
again you see the Roth and traditional
balance discrepancy here out of over 7
million accounts almost 4.2 million I
guess are under ferred but then out of
those number of accounts only about 27%
are under WTH if you're not familiar
with the Roth versus traditional the
basic difference is that with
traditional tsp contributions you get a
tax deduction on the money when you put
it in it goes in before taxes the
trade-off is that when you get to
retirement and withdraw the money you're
taxed on it at that time off money on
the other hand goes in after taxes and
when you get to retirement you withdraw
the money you're not taxed on it again
that's the tradeoff during that time if
it's a long period of time the growth on
the the account will presumably be a lot
and so it has a potential to save you a
lot in taxes assuming it's invested well
depending on your situation of course
also a side note about Roth the tsp
announced back in November that inpl
Roth conversions are coming in 2026 an
often criticized feature about the tsp
or lack of a feature I I should say is
that it does not allow in plan Roth
conversions asset allocation
history here's why this one's
interesting look at this graphic as you
can see what these are these are lines
showing the historical participant asset
allocation in other words how tsp
participants have allocated their funds
or their Investments within the tsp
funds the orange line is the G fund the
green line is the C fund we're in the
middle of a strong bull market that
started late in 2022 roughly the end of
October notice the Divergence in those
two lines as we've gotten closer to the
present what's going on here is people
are putting more money into the C fund
as the bull market goes on that's the
trend and conversely more money is
coming out of the GF fund at the same
time now in the scheme of the total
assets of the tsp and I showed you those
figures earlier it's not a huge
difference but it's an
interesting Trend if especially if you
look at it over a longer period of time
Ralph Smith is another one of the
fedsmith authors and he's researched
this in more deta detail and if you take
a look at this table that he put
together since the end of
2022 138 billion dollars has been moved
into the C fund and 12.3 billion has
come out of the G fund here's why I
found this of interest and why it's
potentially significant what these
Trends show is that to some degree
people are chasing returns in the market
when the Market's up as it has been for
the last couple of years people put more
money into the C fund the stock funds
when the Market's down or going down
more money goes into the G fund because
it's the safest most secure fund the
problem with that is research and data
have shown over time that timing the
stock market is basically impossible
because in order to win at doing that
you have to do it twice the odds are
already against you but having to do it
twice that's even harder and what I mean
by that is you have to know when to sell
and when to buy or vice versa even
professional investors can't do that
most of the time monthly inter fund
transfers this graphic is for January it
surprised me also because the trend I
was just talking about this pattern
completely bucks that Trend so make of
that what you will
1.5 billion roughly came or excuse me
went into the G fund and 263 million
came out of the C fund the reason that's
interesting is because in January the
market was up so what we normally see is
that when the Market's up money flows
into the C fund and the the other stock
funds more than the G fund so this is
completely opposite of that and even
more money came out of the I fund in
December it was the opposite I don't
have these figures here on the screen
but just so you're aware of them about
1.4 billion was transferred out of the G
Fund in December and 1.17 billion went
into the CF fund just for comparison I
thought these figures on the tsp were
interesting I hope you did too I hope
you found them useful and we're almost
at the end of February and that means
that the monthly tsp returns are going
to be coming out so be sure to check
fedsmith.com and our other website tspd
datac center.com because we'll be
posting them as soon as they're
available
thank you for watching have a good day