How TSP Investors Reacted to Performance in 2025
In December, Thrift Savings Plan (TSP) investors began moving funds into the I Fund, with around $5.7 billion transferred in that month alone. Conversely, about $2.4 billion was shifted from the G Fund, roughly $1.6 billion from the C Fund, and about $2.3 billion from the S Fund.
This isn’t entirely surprising. The I Fund delivered an impressive return of 32.45% in 2025, while the C Fund returned 17.85% and the S Fund delivered 11.38%. Sure, the returns for both the C and F funds were solid, but what stands out is that 32.45%. Maybe those who didn’t capitalize on last year’s I Fund gains are looking forward to a similar opportunity in 2026, hoping their retirement accounts might swell with returns from the I Fund.
To give some context, the TSP manages over $1 trillion in assets. So, the recent transfers, while significant, are a small portion of the total.
Asset Allocation Among TSP Participants
Interestingly, the I Fund doesn’t seem to be a favorite among all investors, as shown by the allocation trends. A recent graph illustrates how TSP participants distributed their investments by the end of December 2025.
Lifecycle funds, which invest across various TSP options, tend to have a higher equity component in funds targeting longer retirement horizons compared to more conservative options.
For instance, the L 2075 fund assigns 34.65% to the I Fund, 52.48% to the C Fund, and only 0.36% to the G Fund.
On the flip side, the L 2030 Fund has 19.95% allocated to the I Fund, 29.64% to the C Fund, and a larger 37.38% to the G Fund.
The most conservative option is the L Income Fund, with only 9.63% in the I Fund, 67.06% in the G Fund, and 14.3% in the C Fund. This means it may not keep up as steadily with rising stock prices. According to TSP:
If you were born before 1965 and are withdrawing from your TSP or plan to do so by 2028, an L Income fund could be a wise investment. It’s also beneficial for those who want to leverage daily rebalancing aimed at generating retirement income through ongoing withdrawals.
TSP Trends and Global Stock Investments
It’s not just TSP investors who are increasing their stakes in international stocks. As noted by US News & World Report:
Global equity funds saw their largest weekly inflow in 15 weeks, driven by investor interest in global stocks near record highs, bolstered by last year’s performance despite economic and geopolitical concerns.
Investing based on a fund’s past performance might not always be prudent unless there’s solid reason to believe in its future success. A common justification for boosting allocations to global equities is that foreign stocks seem more attractively priced, balanced, and diversified compared to previous years, particularly after outperforming the U.S. market in 2025.
Recent TSP Updates
The Federal Retirement Savings Investment Board (FRTIB) recently revealed that over 90% of active military members in the Blended Retirement System (BRS) contributed at least 5% of their pay to the TSP in December 2025.
Additionally, around 3 million participants held Roth funds in their TSP accounts. Starting January 1, 2026, a provision in the SECURE 2.0 Act requires catch-up contributions for participants earning over $150,000 in 2025, mandating these to be designated as Roth contributions.
On January 26, 2026, preliminary data showed that most TSP funds had positive returns, which bodes well for participants looking to boost their retirement income. As the year unfolds, updates on fund performance will be closely monitored.
