June 30, 2024

The C Fund has recently produced a lot of millionaire TSP participants. Those TSP participants who steadily invested in the C Fund since or shortly after its inception in 1988 have by now become millionaires, some twice over…despite the downturns over the years!

TL;DR: investing in the stock index funds through the downturns is how real wealth is made!

New funds are blooming
Photo by Micheile Henderson on Unsplash

Those who contributed enough from pay that, together with the government match, was the equivalent of the maximum deferral limit each year in the C Fund are now millionaires. Compare the investing outcomes among the three original funds:

Scroll over the chart to see approximate returns of investing the equivalent of the maximum deferral limit on a monthly basis in that fund, with C Fund investors having past the $1 million mark in 2014. For current total returns for all the funds since their inception and methodology, see this page; to do your own calculations for TSP funds, see this calculator.

In 1988, the deferral limit was just over $7,300, and by 2000 that limit had grown to $10,500. By 2023, the deferral limit had increased to $22,500. (See this chart for past TSP deferral limits.)

Those who contributed the maximum deferral limit from their pay each year and collected the government match are in even better shape (for example, contributing closer to the maximum $22,500 plus the government match of 5% of salary).

Check out “TSP Investing Strategies: Building Wealth While Working for Uncle Sam” for more buy-and-hold, long-term strategies, such as the “Thrift Van Winkle” strategy, strategies to reduce volatility, the “Purchase and PCS” real estate strategy (with six in total), and 529 strategies, among others.

And for those who contributed the maximum deferral limit plus additional “catch-up” contributions (which reached $7,500 in addition to the $22,500 deferral limit) allowed for those over 50, well, the’re doing really well.

(For those who had a little extra in the G or F Fund to use when the C Fund collapsed in 2002-3 and again in 2008-9, they’re probably doing the best of all! See TSP Investing Strategies for more on a basic way to implement this technique.)

Click to the TSP Stats page or the stock and bond funds link to see how the other funds have performed since their inception.

Check out this post to see similar returns for the L Funds, albeit for a shorter timeframe.

And even investing a bare minimum can produce incredible returns over time: “What Does $1,000 a Year Matter?”.

Good luck in your investing!

Related topics: c-fund long-term-investing