financial planner Stephen Zelcer

TSP Planning Report January 2023


  • The G Fund rate for Jan 2023 increased back to 4%.  It was 4.25% in November 2022.  
  • The Fed Funds interest rate increased to 4.33%.  It was .08% last year. 
  • This month’s unemployment rate dropped to 3.5%.  
  • PMI (Purchasing Managers Index) contracted for the 2nd time in 30 months, since May 2020).  This month’s reading came in at 48.4. (Any reading below a score of 50 means contraction). 
  • The S&P 500 (C Fund) decreased 5.78% in December, wiping out all of November’s gains. The S&P 500 finished off 2022 down 18.13%
  • The 1st estimate of Q4 (2022) GDP has come out, showing a 2.9% growth in GDP.  


PMI contracting –

As noted above, PMI (Purchasing Managers Index) contracted for the 2nd time in 30 months.  Practically, what this means is that manufacurers are ordering less materials for good, because they anticipate a decreased demand for goods. 
This is very similar to the mass layoffs we’re seeing.  Employers are forecasting that there’s not going to be much demand in the near future, so all the mass hiring they did when demand was high, has translated into mass firing when demand wanes.  So too, with manufacturing.  
The question is – has this information already been baked into stock prices?  
The answer is likely yes, as major employers just has their earning season report which also serves as an opportunity for them to forecast their future.  

G fund – 

In previous reports I would tout: If you are seeking 4% yields, you don’t need much stock, because as of today the G fund is yielding 4%. 
However, that’s not so accurate, since the Fed has suspended investments in the G fund.  So right now the G fund is yielding 0%.  Yikes!
However, I kept my portfolios assuming the G fund would yield what it’s “supposed to,” meaning, 4%. I did so because once the debt ceiling is raised, which always seems to happen, the G Fund securities are reconstructed, and interest is paid, as if the suspension never happened.  
I wrote a long explanation about this HERE –

Bottom Line:

I was pretty pessimistic for 2022, and I continue my pessimism for 2023.  
If you have G fund in your conservative bucket, based on my conservative bucket strategy, you should consider alternatives to the G fund.  I write about it in my article above.  Please contact me for a specific recommendation.

See this month’s recommended portfolios.  DON’T JUST LOOK AT RATE OF RETURN. Always view the target return of each portfolio in context of its ranges of fluctuation.

Anyone who has more than 5 years before drawing income from their TSP should consider taking a more aggressive posture going forward and use my aggressive portfolios below.  If you are within 5 years of retirement, you should email me to get a more customized recommendation. 

If you have any questions, feel free to contact me.

Email me here –

Click here to download my portfolios.

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