financial planner Stephen Zelcer
TSP Planning advice for Federal Employees

TSP Planning Report January 2022


  • The G Fund rate for January 2022 was set at 1.625%.
  • This month’s unemployment rate decreased from 4.2% to 3.9%.  Unemployment was at 6.3% in January 2021.
  • PMI (Purchasing Managers Index) continued to expand (any reading above a score of 50 means expansion). This month’s reading came in at 58.7, compared to last month’s 61.1.
  • The S&P 500 (C Fund) increased 4.48% in December, compared to the -0.69% decrease in November.  The S&P 500 increased 28.63% in 2021.
  • The 3rd estimate of Q3 GDP shows growth of 2.3%, slightly improved over the previous two estimates, and compared to Q2’s reading of 6.7%.
  • The Fed Funds interest rate remained at 0.15%, however they signaled a rate increase in March 2022.


Rising Interest Rates:
The stock market is starting off 2022 very volatile, mostly due to the anticipated rise in interest rates.  This is not a problem.  
Let me quote myself from numerous prior reports: “inflation will be countered by rising interest rates.  This may cause a temporary dip, but keep buying as it goes down.  Eventually, it will stabilize and come back up.”

As I said last month, both G fund and F fund are poor options in this environment.  G fund is under-performing inflation (inflation is 5.9% while G fund is 1.625%).  F fund is exposed to interest rate risk.  Inflation leads to a rise in interest rates which will crush the F fund.  
Of the two, the G fund is the lesser of the two evils, because the F fund will have a double-whammy: It’ll lose principle and the remaining principle will be deflated, meaning less valuable.   G fund can’t lose principle. 

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 portfolio’s 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.

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Click here to download my portfolios.

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