TSP Funds Explained: A 2026 Complete Guide to G, F, C, S, and I

1. The five funds at a glance

The Thrift Savings Plan offers five individual investment funds and eleven Lifecycle (L) Funds. The five core TSP funds — G, F, C, S, I — are the building blocks. Everything else, including the L Funds, is a recipe made from those ingredients. Here is where each TSP fund stands as of May 13, 2026:

The expense ratios alone deserve a moment. The most expensive TSP fund costs 5.4 cents per $1,000 invested per year. The average 401(k) plan in the United States runs 50 to 150 cents per $1,000 — roughly 10 to 30 times more. Over a 30-year federal career on a six-figure balance, the difference is tens of thousands of dollars in compounded savings that never leave the account as fees.

This cost advantage is the structural reason the TSP keeps producing record numbers of millionaire participants — 194,722 as of January 1, 2026, dropping to roughly 185,000 by April after the Q1 market correction. The funds themselves are unremarkable index trackers. The fees are what compound differently.

The chart shows the 1-year returns across all five funds. The I Fund’s 37.5% leads the lineup — a striking reversal of the previous decade when international stocks dramatically underperformed U.S. stocks. The G Fund’s 4.4% is the only "guaranteed-positive" line on the chart, but it’s also the worst real-return performer when inflation is factored in. The point isn’t that one fund is "best" — it’s that each fund does a different job, and ranking them only makes sense once you know what job you’re trying to fill.

2. G Fund — the government securities anchor

What it holds: Non-marketable U.S. Treasury securities issued specifically to the TSP. These aren’t traded on any open market. They exist only inside the plan.

How the interest rate is set: By federal statute, the Treasury Department resets the G Fund rate monthly to the weighted average yield of all U.S. Treasury securities with four or more years to maturity. The current rate, set on the last business day of the prior month, is 4.50% as of May 2026.

The unique feature: Long-term yields, short-term liquidity. Normally, you’d have to lock up your money in long-dated Treasuries to earn long-term rates. The G Fund pays the long-term yield but lets you withdraw on any business day with no principal risk and no interest-rate risk. There’s no equivalent product available to private-sector workers.

Long-run performance: Since its April 1, 1987 inception, the G Fund has earned an annualized 4.7% nominal. That sounds modest, but with zero volatility and a 0% worst drawdown, it has actually outperformed many "low-risk" alternatives like money market funds, short-term bond funds, and most CDs across most periods.

The honest weakness: Inflation. The TSP itself acknowledges this on tsp.gov: "The G Fund is subject to the possibility that your investment will not grow enough to offset the reduction in purchasing power that results from inflation." Subtracting average CPI (about 2.8% over the G Fund’s life) from the 4.7% nominal return yields a real return of roughly 1.9% per year. During the 2021-2023 inflation spike, the G Fund yielded 2-3.5% while CPI peaked at 9.1% — every G Fund participant lost purchasing power for nearly two years.

For more on when the G Fund’s apparent safety becomes a long-term liability, see G Fund vs C Fund: when each one actually wins in retirement.

3. F Fund — the bond fund nobody talks about

What it holds: A diversified U.S. bond portfolio tracking the Bloomberg U.S. Aggregate Bond Index — roughly 13,000 investment-grade bonds spanning U.S. Treasuries, corporate bonds, mortgage-backed securities, and asset-backed securities.

Why it’s the most overlooked fund: The F Fund is mathematically duplicative for most participants who already hold G Fund. The G Fund offers similar (or better) returns to short-and-intermediate Treasuries without principal risk. The F Fund adds credit risk and interest-rate risk in exchange for a small additional yield from corporates and mortgages.

Recent performance:

The five-year picture is brutal for the F Fund. From 2021 to early 2023, the F Fund lost roughly 18% as interest rates rose and bond prices fell. The G Fund, by contrast, kept appreciating. This isn’t a failure of the F Fund — it’s how all aggregate bond funds work when rates rise. But it makes the case that for a TSP investor, the G Fund is usually the better "safe" choice unless you specifically want exposure to credit risk and the corporate/mortgage segments.

4. C Fund — the S&P 500 workhorse

What it holds: Shares of the 500 largest U.S. companies — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, Berkshire Hathaway, and so on — weighted by market capitalization. It tracks the S&P 500 Total Return Index.

Why most federal employees end up here: The C Fund is the workhorse of the TSP. It’s the most-allocated-to individual fund in the plan, and it accounts for the bulk of the wealth held by TSP millionaires. As of May 13, 2026, the C Fund has:

• YTD 2026 return: +9.2% (after a rough Q1 that ended at -4.34% YTD, recovered by April’s +10.49% single-month return)
• 1-year return: 28.0%
• 5-year annualized: 14.2%
• 10-year annualized: 15.7%
• Since inception (1988): 11.5%

A $1,000 investment at the C Fund’s January 1988 inception would be worth approximately $64,674 today — a 64-fold increase over 38 years.

The real cost: volatility. The C Fund has an annualized standard deviation of 17.8%, meaning roughly two-thirds of annual returns fall within a range of plus-or-minus 18 percentage points from the average. The fund’s worst peak-to-trough drawdown since inception was -55.2% during the 2008-2009 financial crisis. Anyone telling you "the C Fund always goes up" is missing the 18-month period when it dropped to less than half its starting value.

Why the volatility usually doesn’t matter for accumulators: If you’re 30 years from retirement, a 55% drawdown is mathematically temporary because you’re buying more shares every payday during the decline. Federal employees who kept contributing through 2008-2009 ended up with substantially more wealth by 2020 than those who panicked and moved to G Fund near the bottom.

The C Fund’s worst drawdown since 1988 was 55.2%. The C Fund’s 38-year annualized return is 11.5%. Both numbers are true at the same time. The discipline is staying invested when the first number is showing up on your statement.

5. S Fund — the small and mid-cap completion

What it holds: Shares of every U.S. company not in the S&P 500 — roughly 2,500 small and mid-cap companies tracking the Dow Jones U.S. Completion Total Stock Market Index. Think of it as "everything in the U.S. stock market that isn’t already in the C Fund."

Why it exists: Small and mid-cap U.S. stocks have historically delivered slightly higher long-term returns than large caps, with proportionally higher volatility. Owning both C and S Funds together gives you exposure to the entire U.S. stock market.

Recent performance:

• YTD 2026: roughly -1% through May (the S Fund had a rough Q1 at -1.22% YTD then a strong April at +9.96%, finishing close to flat through mid-May)
• 1-year return: approximately 18%
• 10-year annualized: 11.3%
• Since inception (May 2001): 9.6%
• Annualized standard deviation: 22.0% (the highest of any TSP fund)

A $1,000 investment at the S Fund’s May 2001 inception would be worth approximately $9,971 today.

The trade-off: Higher volatility than C, but no guaranteed return premium. Over the last 10 years, the S Fund’s annualized 11.3% is actually below the C Fund’s 15.7% — large-cap U.S. stocks have outperformed small-and-mid caps for most of the post-2015 period. Whether the S Fund’s long-run premium reasserts itself remains a perennial debate in retirement planning.

6. I Fund — international, after the 2024 overhaul

What it holds (as of 2026): Shares of approximately 5,500 companies across 44 countries — 21 developed markets plus 23 emerging markets. Notable exclusions: China and Hong Kong (excluded by congressional pressure, including the S.1665 Prohibiting TSP Investment in China Act).

The fund tracks the MSCI ACWI IMI ex-USA ex-China ex-Hong Kong Index.

Why this matters — the 2024 overhaul: The I Fund used to be much narrower. Prior to 2023, it tracked the MSCI EAFE Index, covering only about 790 stocks in 21 developed-market countries (mostly Japan and Europe), with no Canada and no emerging markets at all. In 2024, the FRTIB switched to the current broader index, dramatically expanding the I Fund’s diversification.

The result: federal employees now get genuine global stock exposure inside the TSP, instead of a Europe-and-Japan-only fund.

2026 performance:

• YTD 2026: +14.2% (the strongest fund in the lineup year-to-date)
• 1-year return: 37.5%
• 10-year annualized: 10.4%
• Since inception (May 2001): 6.5%

The I Fund’s strong 2025 and early 2026 performance reversed a decade-long pattern of international underperformance vs. U.S. stocks. From roughly 2010 to 2023, U.S. stocks dramatically outperformed international, leading many TSP participants to underweight or skip the I Fund entirely. Whether the current outperformance continues is the open question of 2026 portfolio allocation.

The currency factor: The I Fund is not currency-hedged, meaning returns are influenced by U.S. dollar movements. When the dollar weakens (as it has in parts of 2025-2026), international holdings translate to more dollars and the I Fund gets a boost. When the dollar strengthens, returns drag.

7. L Funds — the auto-allocation option

The Lifecycle Funds aren’t separate investments — they’re pre-built recipes that hold the five individual funds in specific proportions, automatically shifting toward more bonds as the target year approaches.

Eleven L Funds as of 2026:

• L Income — for participants already withdrawing or near withdrawal
• L 2030 — target withdrawal 2028-2032
• L 2035 — target 2033-2037
• L 2040 — target 2038-2042
• L 2045 — target 2043-2047
• L 2050 — target 2048-2052
• L 2055 — target 2053-2057
• L 2060 — target 2058-2062
• L 2065 — target 2063-2067
• L 2070 — target 2068-2072 (inception July 2024)
• L 2075 — target 2073+ (inception June 2025)

What they cost: Same underlying expense ratios as the individual funds, weighted by allocation. No extra "fund of funds" fee. This makes them genuinely free auto-rebalancing.

What’s in them:

Who should use them: Participants who don’t want to manage allocation themselves, especially auto-enrollees under 30 who don’t have a strong view on stocks vs. bonds. The L Funds are calibrated for the average federal employee — someone who may not have a pension at all in retirement.

The hidden assumption: L Funds assume your TSP is the primary leg of retirement. For a FERS employee with a 30-year pension, the L Income Fund’s 70% bond allocation may actually be too conservative, because the FERS pension already covers a substantial fraction of essential expenses. Many retirement researchers argue that federal retirees with strong pension coverage can afford an equity-tilted allocation more aggressive than what the L Income Fund provides.

For more on TSP allocation in retirement specifically, see G Fund vs C Fund: when each one actually wins in retirement.

8. The Mutual Fund Window: when it’s worth $132 a year

In June 2022, the TSP added the Mutual Fund Window (MFW) — an option to invest up to 25% of your TSP balance in roughly 5,000 outside mutual funds from Vanguard, Fidelity, T. Rowe Price, and about 300 other fund families.

Almost nobody uses it. As of February 2026, only about 9,000 of 7 million TSP participants had funded a Mutual Fund Window account. That’s roughly 0.13% adoption.

Why so few: Fees and complexity.

The fees stack:

• $95 annual maintenance fee to the brokerage provider
• $55 annual administrative fee to the FRTIB (to ensure non-MFW users don’t subsidize the option)
• $28.75 per trade (buy and sell)
• Plus the expense ratio of each mutual fund you actually invest in

The fee math:

At the $10,000 minimum allocation (the entry point), MFW costs you roughly 2% annually before the underlying mutual fund’s expense ratio. That’s higher than 99% of all mutual funds in the U.S. retail market. The fee structure is essentially designed for high-balance accounts.

When the MFW can make sense:

• You have a $200,000+ TSP balance so the fixed fees are diluted to under 0.4%
• You want exposure to asset classes the core TSP doesn’t cover — emerging markets beyond the I Fund, REITs, commodities, sector funds, ESG funds, or actively managed alternatives
• You’re disciplined enough to trade rarely (each trade is $28.75)

When it doesn’t make sense:

• You’d use it to buy an S&P 500 index fund (the C Fund already covers this for free)
• Your balance is under $100,000
• You’d plan to do Roth in-plan conversions (MFW balances must be moved back to core funds first, which adds time and trade fees)

9. Picking a mix that actually fits your career stage

The honest answer to "what allocation should I use?" depends on three things: how far you are from retirement, how secure your future pension is, and how much short-term volatility you can stomach without panicking.

Below is a defensible framework, not a recommendation. Adjust based on your specific situation.

A few principles built into these numbers:

Equity exposure stays high even in retirement. A federal retiree with a 30-year horizon needs growth as much as any accumulator. The G/F percentage shown is a tactical cash bucket — typically 3-5 years of withdrawal needs in G Fund — not a strategic core.

The stock split is 60-65% C, 15-20% S, 15-20% I. This roughly matches global stock market capitalization while keeping a slight home-country bias most American investors are comfortable with.

The F Fund mostly stays at zero. As section 3 showed, the F Fund doesn’t add much over G Fund for most TSP participants. Some allocations include 2-5% F for diversification, but it’s rarely a high-impact move.

These allocations assume a participant with a FERS pension. Anyone without a pension — uniformed services members under BRS who separate before 20 years, or federal employees who took deferred retirement — should run a different calculation that puts more pressure on the TSP to replace lifetime income.

For TSP allocation during working years specifically, Federal Warrior covers Federal Warrior's career and pay coverage ↗ for accumulators at every GS level.