If you’ve checked the headlines lately—or your Thrift Savings Plan (TSP) balance—you’ve no doubt seen the market’s concerning trajectory.
On April 3, 2025, the stock market saw a sharp decline, with the Dow dropping more than 1,000 points in just one morning.
And on April 7, U.S. stocks swung between huge losses and gains in Monday trading. The S&P 500 fell as much as 4%, briefly entering bear market territory, before rebounding.
The spark? A newly announced round of tariffs from President Trump, reigniting concerns about a global trade war.
Major players in the global supply chain—companies like Apple, Amazon, and Nike—were hit particularly hard. Meanwhile, gold prices climbed, as investors sought the relative safety of more stable assets.
These kinds of headlines are hard to ignore, especially when your retirement savings are involved.
As you watch the news about the stock market, it’s hard not to react. It’s human nature to want to act. “Fight or flight,” as the saying goes.
So how will this current “crash” affect my Thrift Savings Plan (TSP)?
The good news is there will not be a direct impact on the TSP. However, as with any market volatility, your TSP stock fund values will obviously go down.
I’ve talked about volatility and your TSP before, but as a reminder, here are three lessons we can all take away from this recent down market:
1. Your TSP is a Long-Term Retirement Account
People invest in an account like the TSP (or a 401k or an IRA) because these are long-term retirement vehicles. There will be highs and lows, but you should think of these investments in the “long term” and try not to panic when faced with a down market. As we’ve seen time and time again, the market will eventually correct itself.
2. Don’t Let Your Emotions Affect Your Investment Decisions
It’s important to consider how your emotions affect your investment decisions—specifically fear and greed. Fear that the market may fall can lead to panic and poor choices. A stretch of continued positive returns can lead to greed and excitement, leading to false thinking that the market will continue to go ever higher without a correction. Just remember that knee-jerk reactions—in a good or a bad market—rarely favor the investor.
3. Learn How to Leverage Your TSP
Spend time learning about your TSP account to understand the risk, volatility, and options you have to choose from when saving for retirement. Check out this podcast episode where I talk about “Your Mindset on TSP in a Down Market.” I would also recommend consulting with a financial professional who can help you make sound investment decisions and set goals for your retirement.
Market volatility is unavoidable. Just remember, investing is not for the faint of heart. It’s a rollercoaster ride, if we’re lucky, because the market’s going up and the market’s going down is what makes it work.
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