Financial Readiness
What each TSP fund actually holds, what it costs, and how to think about picking a mix.
Service members attend a Thrift Savings Plan class. U.S. Army photo by Sgt. Marquis Hopkins, DVIDS (public domain).
The TSP is your military retirement account, and it gives you a small menu of funds to invest in. There are five core funds, G, F, C, S, and I, plus eleven Lifecycle (L) funds that pre-mix the five for you by target date.
You do not have to be an expert. The two simplest moves are to pick one L fund that matches when you will need the money, or to build your own blend of the five core funds. Either beats never logging in to check.
The five core funds are the building blocks. The L funds blend them for you. Here is what each one holds and roughly what it cost in 2025.
Plus the L funds
G protects principal but carries inflation risk; the stock funds chase long-term growth.
Source: TSP.gov · 2025 total expense ratios · figures may change
The G fund holds short-term U.S. Treasury securities issued only to the TSP. Its goal is to preserve your money while earning interest. Principal and interest are backed by the U.S. government, so it is designed to protect your principal from loss.
The trade-off is inflation risk, meaning rising prices can chip away at what your money buys. The TSP itself notes the G fund may not grow enough to offset that over time. Parking everything here decades from retirement can quietly cost you growth.
The C fund (the "C" is for common stock) tracks the S&P 500 Index, a market list of 500 large U.S. companies. An index is just a published list a fund copies. When people say "the market" had a good or bad day, the S&P 500 is often what they mean.
It swings more day to day than the G or F funds, which is the price of higher long-term growth potential. Many service members with a long timeline lean toward the stock funds, then add some bonds for steadiness.
The F fund (fixed income) tracks a broad U.S. bond index covering government, corporate, and mortgage-backed bonds. It tends to be steadier than stocks, and mixing bonds with stocks tends to smooth the ride.
The S fund (small cap) holds small and mid-size U.S. companies that are not in the S&P 500. Paired with the C fund, it covers U.S. companies of all sizes. The I fund (international) holds stocks of companies outside the U.S., so your money is not riding on the U.S. market alone.
TSP costs are very low. In 2025 the total expense ratios were G 0.034%, F 0.035%, C 0.035%, S 0.051%, I 0.048%, and the L funds ran from about 0.035% to 0.041%. The expense ratio is the slice of your balance taken each year to run the fund. At 0.035%, that is 35 cents a year per $1,000 invested.
So how do you actually pick? The TSP gives you two clear paths.
VetraFi cannot pick for you. The right answer depends on your timeline and how much volatility you can handle. But the TSP really only offers two clean paths.
Pick your path
The most common mistake
Either path beats leaving money where you never checked it.
Source: TSP.gov · Individual and Lifecycle fund pages · general education
Path 1 is hands-off. You pick the L fund with the target date closest to when you expect to need the money. It blends all five core funds and shifts toward a more conservative mix each quarter as the date nears. New BRS enrollees are placed in an age-appropriate L fund by default for this reason.
Path 2 gives you more control and more responsibility. You set your own percentages across G, F, C, S, and I, then rebalance and adjust as you age. A long timeline often points toward the stock funds early, with more bonds added over time. If you go this route, revisit your mix now and then so it still fits your life.
You do not have to figure this out alone. Your installation Personal Financial Manager or Personal Financial Counselor can talk through an allocation for your timeline at no cost. You can also see and change your current fund mix in your account at tsp.gov or through the ThriftLine. The fund pages and contact details are linked in Sources below.
What are the TSP funds?
Five individual funds (G, F, C, S, I) plus eleven Lifecycle (L) funds that blend them by target date. G and F are bond-style; C, S, and I are stock funds.
Which TSP fund should I choose?
It depends on your timeline and how much volatility you can handle. One simple route is the L fund matched to your target date, which sets and adjusts the mix for you. The other is building your own mix from the five core funds. VetraFi cannot recommend a specific allocation.
Is the G fund safe?
It is designed to protect principal from loss, with principal and interest backed by the U.S. government. It still carries inflation risk, since slow growth may not keep pace with rising prices over decades.
Can I change my TSP funds whenever I want?
Yes. You can change what your future contributions buy and move existing money between funds at tsp.gov or through the ThriftLine. Frequent trading is generally discouraged for long-term investors.
