2025 TSP Rollercoaster and the G Fund Merry-go-Round

Whichever ride you prefer, the most important thing is that you feel comfortable, it is your money, it is your decision. Image: Lightspring/Shutterstock.com
By: Abraham Grungold

During my 38 years of being a Thrift Saving Plan (TSP) participant, I have been on many different TSP Rollercoasters, and I have to say the ride is rough, but comes with great rewards. The goal for every federal employee is to become a TSP millionaire.

To clarify the TSP Rollercoaster is a ride for those TSP active or retired participants who are investing in the C, S and I fund as well as the Life Cycle Funds. The rest of TSP participants who are in the G Fund are riding a Merry-go-round with no risk heading in a circle and enjoying the festive music.

Over the past 25 years, I survived many ups and downs on the TSP rollercoaster. Let us look at some historical events.

In 2000, I survived the DOT COM BOOM Rollercoaster. This was a rollercoaster which affected the NASDAQ markets for many years.
In 2008, the FINANCIAL CRISIS was a very long TSP rollercoaster ride. The ride lasted for years and there were many volatile turns along the way. The Financial Crisis rollercoaster caused my TSP account to decrease in value by 40 percent but that was a progressive drop over an extended period, 2008 to 2009. The markets recovered in 2014 again to an all-time high.
In 2016, the Brexit Crisis. And in 2017, the Korean Missile Crisis were false alarms.
In 2020, The TSP COVID Rollercoaster was the biggest and scariest ride of them all. There was so much uncertainty and the biggest fear was in the very first drop of the ride. The first drop caused my TSP to depreciation 35 percent within a few weeks. The markets bounced back in January 2022, again to an all-time high.
In 2022, the Ukrainian War Rollercoaster caused a similar drop in the TSP as it did for COVID Rollercoaster. The drop was steady and slower. My account dropped approximately 25 percent and again it recovered in January 2024 to an all-time high.
In 2024, my TSP reached an all-time high prior to the Presidential election. I did not have a good feeling about the election so I got off the Rollercoaster and got on the G Fund Merry-go-round.
In 2025, the Liberation Day Tariffs were making the financial markets very nervous. I saw the sharp drop in major indexes as buying opportunity. Having spent some time on the G Fund Merry-go-round I returned to the TSP Rollercoaster. The Tariffs caused the markets to drop 10% which is a normal dip on any Rollercoaster. Within two weeks, the markets recovered. And during January to October 2025, my TSP grew by 23%.

During a downward trend in the market, you are buying cheaper shares of your funds. It is called Dollar Cost Average investing. If you panic and transfer your investments into the G Fund you have recognized a loss. Buying high and selling low is not an investment strategy, it is a recipe for disaster. I read the Facebook TSP forums. It amazes me how many people are taking financial advice from strangers.

What are the tips of surviving the ride?

It is a simple approach that I have for each ride.

I take a deep calming breath and hang on with both hands in the first drop. Many times, I close my eyes. And what that means is that I close my eyes to the financial news. Watching the financial news during a financial crisis only causes anxiety and panic. And each time the ride ended; the TSP came back stronger than ever.

Every time I experienced a dip in the market, I am contacted by clients, friends, and former co-workers. They all are ready to jump off the ledge and say that the sky is falling.

They immediately want to transfer all their TSP holdings to the G Fund. Depreciation means a decrease in value not a loss. Well, anyone that does transfer their holdings to the G Fund during a downward trend in the market is certainly losing money in their accounts.

The best thing to do is nothing. Every person who does nothing only has to wait for the market to bounce back as it did in April 2025. And your TSP account will be higher than it was before as it has in June 2025.

And what is my opinion of those TSP participants who only invest in the G Fund their entire careers and in retirement? My comment is simple, some people prefer merry go rounds and some love the adrenaline of rollercoasters.

Risk takers such as me will ride the TSP Rollercoaster during their career and into retirement. Whichever ride you prefer, the most important thing is that you feel comfortable, it is your money, it is your decision. Please do not let the hype of strangers influence your decisions.

How do TSP loans and withdraws factor in?

Many investors are concerned about TSP loans and TSP withdrawals and how does that affect your TSP strategies.

As a TSP investor, I had four TSP loans during my federal career. The loans did not affect my goal to become a TSP millionaire.

And with respect to TSP withdrawals, I started making monthly withdrawals on my first day of retirement and terminated them when I started receiving my Social Security payments.

TSP withdrawals never prevented me from continuing to grow my TSP balance.

Abraham Grungold is a retired federal employee with 36 years of federal service – including with the USPS Inspector General, the VA Inspector General, the US Dept of Justice, and the US Dept of Labor. Through his company AG Financial Services he helps federal employees with their TSP and federal retirement planning and decisions. Mr. Grungold has written over 80 articles regarding the TSP and FERS retirement and been a guest on several podcasts with the Federal News Radio and Government Executive Magazine.

5 Steps to Protect Your Federal Job During the Shutdown

Over 30K TSP Accounts Have Crossed the Million Mark in 2025

The Best Ages for Federal Employees to Retire

Best States to Retire for Federal Retirees: 2025

Primer: Early out, buyout, reduction in force (RIF)

2025 TSP Rollercoaster and the G Fund Merry-go-Round

Tags: