C Fund Slips Into the Red — What TSP Investors Need to Know Now

Federal employees and retirees saw a disappointing milestone this week: the C Fund (Common Stock Index Investment Fund)—a longtime core holding in many TSP accounts—has officially dipped into negative territory year-to-date.

Here’s where the funds stand as of April 2, 2025:

While the C Fund saw a mild rebound yesterday, it’s still down 3.3% YTD, reflecting a turbulent start to Q2. The S Fund, tracking smaller U.S. companies, is struggling even more with a –6.9% YTD return.

Why the Slide?

The decline isn’t happening in a vacuum. Here’s what’s adding pressure to TSP performance:

Trump’s Surprise Tariffs:
Just last night, President Trump unveiled a 10% across-the-board tariff on all imported goods, with higher rates targeting specific nations. Markets reacted swiftly, rattled by fears of rising consumer costs and international retaliation.

Market Volatility on the Rise:
As uncertainty around trade and inflation grows, volatility is returning to the markets. That’s especially important for TSP investors holding equity-heavy allocations in the C, S, or I Funds.

Investor Sentiment Is Shifting:
Some federal employees and retirees are adjusting their allocations toward more stable options—such as the G Fund, which has remained in positive territory this year.

What Should TSP Investors Do Now?

Here are a few steps to consider in response to this market dip and policy shakeup:

✅ Review Your Risk Tolerance:
If you’re within 5–7 years of retirement, it may be time to rebalance toward more conservative funds like the G or F Funds. Younger investors may still benefit from riding out short-term dips.

✅ Think Long-Term:
Markets fluctuate, and reacting too quickly can lock in losses. Remember: TSP is a marathon, not a sprint. Make sure your allocations match your timeline and retirement goals.

✅ Watch for Further Policy Moves:
This may not be the last of the tariffs or economic announcements this year. Stay informed, especially as these policies may indirectly affect TSP returns and federal benefit structures.

Quick Tip

Did you know the L Funds (Lifecycle Funds) automatically adjust your allocations over time? If you're unsure how to rebalance manually, an L Fund might be a smart passive strategy.

Retirement Resilience Starts With Insight

At the Federal Wealth Retirement Newsletter, we’re committed to helping federal employees, retirees, and military personnel make confident, informed decisions about their future.

As markets shift and policy landscapes change, we’ll continue delivering clear, actionable updates to keep your retirement strategy strong.