Retirement plan funds continue downward spiral

All but two of the investment options in the federal employee retirement savings plan posted losses in September for the fifth month in a row, bringing returns so far this year further into the negative.

The Thrift Savings Plan's S Fund, which invests in small and midsize companies and tracks the Dow Jones Wilshire 4500 Index, saw the largest decline for the month, falling 10.73 percent. The I Fund, which invests in international stocks, was close behind with a 10.55 percent drop, while the C Fund -- invested in common stocks of large companies on the Standard & Poor's 500 Index -- declined 7.03 percent.

The I Fund has lost 15.70 percent this year to date, followed closely by the S Fund, down 14.85 percent in 2011. The C Fund has lost 8.70 percent for 2011.

The F Fund, which invests in fixed-income bonds, was in the black for the third month in a row, posting gains of 0.73 percent. The stable government securities in the G Fund also had small monthly growth of 0.16 percent. The F Fund has increased 6.68 percent so far this year, while the G Fund rose 2.01 percent in 2011.

All the life-cycle funds, designed to move investors to less risky portfolios as they get closer to retirement, saw losses for the fifth straight month. The L 2040 dropped 6.85 percent in September; L 2030 declined 5.92 percent; L 2020 lost 4.73 percent; and L Income, for federal employees who have reached their target retirement date and have started withdrawing money, fell 1.51 percent. The new L 2050 Fund, which opened on Jan. 31, declined 7.80 percent.

After September's performance, all of the L funds have dropped into the negative for the year. L 2040 is down 8.49 percent so far this year, with L 2030 close behind at 7.05 percent and L 2020 down 5.21 percent. L Income lost 0.29 percent in that time.