TSP Fund Allocation: G, F, C, S, I and L Funds Explained

You've been contributing to your TSP for years. But are you actually invested right for where you are in your career — and for what retirement looks like as a federal employee? This guide breaks down each fund and what a reasonable allocation actually looks like at different stages.

The five core funds: what each one is

TSP offers five individual funds. Each tracks a specific asset class. You can allocate any percentage across them.

G Fund — Government Securities Investment Fund

The G Fund holds short-term U.S. Treasury securities specially issued to the TSP. Its interest rate is calculated monthly as the weighted average yield of all U.S. Treasury notes and bonds with four or more years to maturity — which means you earn a longer-maturity yield with zero principal risk.¹

This is the most important thing to understand about the G Fund: there is no equivalent outside TSP. A money market fund earns overnight rates. A long Treasury fund earns the same yield but exposes you to price volatility when rates move. The G Fund gives you the long yield and guarantees your principal. Once you leave TSP, you cannot replicate this.

The tradeoff: the G Fund's real return (after inflation) is modest. Over long accumulation periods, an all-G allocation almost certainly underperforms equities — but it has a specific and irreplaceable role near and in retirement as a stable income source.

F Fund — Fixed Income Index Investment Fund

The F Fund tracks the Bloomberg U.S. Aggregate Bond Index — the same index most broad bond funds use. It holds U.S. government bonds, corporate bonds, and mortgage-backed securities across a range of maturities.²

Unlike the G Fund, the F Fund's price fluctuates with interest rates. When rates rise, the F Fund price falls. This was painfully visible in 2022 when the Bloomberg Aggregate lost over 13%. For federal employees who are already receiving a fixed pension (FERS annuity), additional fixed-income exposure via the F Fund may be redundant — your pension already functions as a very large bond.

C Fund — Common Stock Index Investment Fund

The C Fund tracks the S&P 500 — the 500 largest U.S. publicly traded companies. It is the core equity engine of most TSP portfolios.³

Long-term historical returns of the S&P 500 have averaged roughly 10% annually before inflation (roughly 7% real). The C Fund captures these returns at a total expense ratio of 0.035% in 2025 — meaning $3.50 per year on every $10,000 invested.⁴ For comparison, the average actively managed U.S. equity fund charges over 0.50%.

S Fund — Small Capitalization Stock Index Investment Fund

The S Fund tracks the Dow Jones U.S. Completion Total Stock Market Index — essentially all U.S. stocks not in the S&P 500. That means small- and mid-cap companies across every sector.⁵

C Fund + S Fund together approximate the total U.S. stock market. A common allocation is roughly 80% C / 20% S (mirroring the market-cap split), though many investors tilt heavier toward C for stability. Small-cap stocks have historically outperformed large-cap over very long periods but with higher short-term volatility.

I Fund — International Stock Index Investment Fund

The I Fund tracks the MSCI EAFE Index — developed market equities in Europe, Australasia, and the Far East. It does not include emerging markets or Canada.⁶

International diversification has underperformed U.S. equities significantly over the past 15 years, which has led many federal employees to minimize or eliminate it. The argument for including some I Fund: currency diversification, and the historical tendency for international to mean-revert after long underperformance cycles. A modest allocation (10–20% of equity) is reasonable; going heavy international based on recent performance alone is performance-chasing in reverse.

L Funds — Lifecycle Funds (the "set it and forget it" option)

L Funds are target-date funds that automatically blend the five core funds and gradually shift from aggressive to conservative as the target year approaches.⁷ As of 2026, the available L Funds are:

• L Income — for participants currently taking withdrawals. Holds a high proportion of G and F Fund. The L 2025 Fund merged into L Income on June 30, 2025.
• L 2030, L 2035, L 2040, L 2045, L 2050, L 2055, L 2060, L 2065, L 2070, L 2075 — for participants who plan to start withdrawals around the target year.

The right L Fund is generally the one closest to when you expect to begin drawing down your TSP — not necessarily your retirement date, especially if you plan to leave TSP funds to grow for years after federal service ends.

L Funds are a reasonable default for participants who don't want to actively manage their allocation. The limitation: TSP's L Funds assume a generic investor. They don't account for the fact that your FERS pension already provides substantial fixed income, which may mean you can afford to stay more aggressive in TSP longer than the fund's glide path suggests.

Allocation strategy by career stage

Early career (25+ years to retirement)

Maximize equity exposure. A simple allocation: 80% C Fund, 20% S Fund, or use L 2055–2065 and let the glide path handle it. The G Fund has almost no role this early — you want growth, not capital preservation.

Mid-career (10–25 years to retirement)

Still primarily equities. Many planners suggest 80–90% equity allocation with a decade or more to go. If you're using individual funds rather than L Funds: 60–70% C, 15–20% S, 10–15% I, with a small G Fund allocation (5–10%) as a rebalancing buffer. Your FERS pension accruing in the background is your "bond" — you don't need a lot of fixed income in TSP too.

Near retirement (3–10 years out)

Sequence-of-returns risk becomes real. A market drawdown the year before you separate hits differently than one 20 years out. This is the stage where gradually shifting 15–30% into G Fund makes sense — not to earn more, but to reduce the risk that a market drop forces you to sell equities to fund living expenses.

Critically: if you plan to delay TSP withdrawals for years after retirement (common among federal employees who have FERS annuity + FERS supplement + eventual SS to live on), you have more time than your retirement date suggests. Don't over-conservatize TSP if you're not drawing from it for another decade.

In retirement (taking distributions)

The bucket approach works well here. Keep 2–3 years of planned TSP withdrawals in the G Fund — that's your spending bucket. Keep the remainder in equities (C and S funds). Replenish the G Fund bucket from equity gains in strong years. This prevents selling equities during downturns.

Note: Roth TSP balances have no required minimum distributions starting in 2024 (SECURE 2.0 § 325).⁸ Traditional TSP RMDs begin at age 73 (for those born 1951–1959) or 75 (born 1960 or later). Factor this into how aggressively you manage down the traditional balance before RMDs force distributions you don't need.

Common allocation mistakes

When allocation alone isn't the question

TSP fund allocation is tactical. The strategic questions are harder:

• Should you be contributing traditional TSP or Roth TSP at your current bracket — and does the answer change once your FERS supplement and SS stack up?
• If you're planning Roth conversions between 57 and 70, how does TSP allocation interact with your rollover timing?
• If you have a large traditional TSP balance, what's your RMD projection at 73 or 75 — and does that create a tax problem you should be managing now?
• Your surviving spouse inherits your TSP or IRA with different RMD rules — does your account structure reflect that?

These questions connect to your FERS pension elections, Social Security timing, state tax treatment of federal retirement income, and your estate plan. They're not answerable by a fund allocation grid.

Sources

1. TSP — G Fund: Government Securities Investment Fund. Special-issue Treasury security; principal guaranteed, earns weighted average of 4+ year Treasury yields.
2. TSP — F Fund: Fixed Income Index Investment Fund. Tracks Bloomberg U.S. Aggregate Bond Index.
3. TSP — C Fund: Common Stock Index Investment Fund. Tracks S&P 500 index.
4. TSP — Expenses and Fees. C Fund total expense ratio: 0.035% (2025); as of January 2026, fewer than 1% of ~170,000 investment funds on FactSet reported lower expenses.
5. TSP — S Fund: Small Capitalization Stock Index Investment Fund. Tracks Dow Jones U.S. Completion Total Stock Market Index.
6. TSP — I Fund: International Stock Index Investment Fund. Tracks MSCI EAFE Index (developed international markets, excluding Canada and emerging markets).
7. TSP — Lifecycle Funds. L 2025 retired into L Income June 30, 2025; L 2075 added 2025. Available funds as of 2026: L Income, L 2030–L 2075.
8. SECURE 2.0 Act § 325. Eliminated lifetime RMDs on Roth 401(k) and Roth TSP balances, effective 2024.

TSP fund descriptions and expense ratios verified against tsp.gov as of April 2026. TSP is administered by the Federal Retirement Thrift Investment Board (FRTIB).