Remarkable TSP Performance in 2025: Is This the Highest Ever?
In 2025, all TSP funds saw an increase in annual revenue. This is a positive development for TSP investors, especially since it marks the second consecutive year of profits across the board.
The I-Fund was launched in 2025, boasting an impressive annual return of 32.45%, making it the top performer among TSP funds.
Some might assume, based on recent trends, that this I Fund return is an all-time high for TSP funds. However, that’s not entirely accurate.
The last time a TSP fund recorded an annual return of 32.45% or better was in 2013. During that year, the C fund also achieved a 32.45% return, while the S fund led with a remarkable 38.35%.
From 2014 until 2024, no TSP fund exceeded a 32.45% return, making 2013 the most recent year of such extraordinary gains before the I Fund’s stellar performance in 2025, which was bolstered by strong global market trends outside the U.S.
The highest return in TSP history belongs to the S Fund, which recorded an impressive 42.92% in 2003. This spike came as small- and mid-cap stocks rebounded following various economic challenges, including the dot-com bubble burst and the September 11 attacks.
It’s worth noting that there has never been a year where all TSP funds lost money—the G Fund has consistently provided positive returns.
TSP Returns for 2025
| Fund | Price | December Return | 2025 Return |
|---|---|---|---|
| G Fund | $19.5877 | 0.35% | 4.44% |
| F Fund | $20.8818 | -0.26% | 7.21% |
| C Fund | $109.5126 | 0.06% | 17.85% |
| S Fund | $100.4077 | -0.53% | 11.38% |
| I Fund | $55.4922 | 3.04% | 32.45% |
| L Income | $29.2433 | 0.51% | 9.36% |
| L 2030 | $58.0982 | 0.72% | 15.17% |
| L 2035 | $17.6793 | 0.76% | 16.27% |
| L 2040 | $67.7859 | 0.80% | 17.31% |
| L 2045 | $18.7561 | 0.83% | 18.20% |
| L 2050 | $41.5515 | 0.86% | 19.07% |
| L 2055 | $21.4292 | 1.01% | 21.87% |
| L 2060 | $21.4268 | 1.01% | 21.88% |
| L 2065 | $21.4243 | 1.01% | 21.88% |
| L 2070 | $12.6979 | 1.01% | 21.89% |
| L 2075 | $11.0917 | 1.01% | Not applicable |
Evaluating Your TSP Performance
Funds focused on equities (C, S, I) are the only ones that can achieve such high annual returns. Typically, G Fund yields hover in the low single digits, while F Fund yields rarely exceed the mid-teens, although they’ve glimpsed over 10% in the past. Given its mixed nature, the L fund doesn’t reach those heights.
- C Fund (S&P 500 Tracker): The return in 2013 was exactly 32.45%. Other notable highs were 37.41% in 1995 and 33.17% in 1997.
- S Fund (U.S. small and medium-sized stocks): The highest recorded was 42.92% in 2003, with 38.35% in 2013 and multiple years surpassing 32% during strong small-cap rallies.
- I Fund (International Stocks): Its peak return was 32.45% in 2025, while it hit 30.04% in 2009, following the global financial crisis.
- F Fund: Previously, it peaked at 18.31% in 1995 and 15.75% in 1991, largely driven by lower interest rates that positively impacted bond prices.
- G Fund: Known for its consistent low single-digit returns, it’s considered the safest TSP fund, with no principal risk.
Small-cap stocks, which the S Fund tracks via the Dow Jones U.S. Completed Stock Market Index, typically lead market recoveries. These stocks often rebound first due to their cyclically sensitive nature, benefitting from an early cycle dynamic when riskier assets are favored.
During bull markets, equity-based funds have shown remarkable returns, especially the S Fund thanks to its strong small-cap performance during specific recovery phases.
Conclusion
The TSP is an essential part of federal employees’ retirement plans, presenting an accessible way to invest with funds that deliver solid performance while minimizing risk. Congratulations to TSP investors on a fruitful year for equity funds.
