TSP L2050

1

Q: I am considering shifting my savings from the L2030 into the L2050 now while the share prices are low ($10.14 as of today). Do the share prices grow strictly by fund performance or by the number of shares held? I understand that the fund balancing is by design more aggressive and the chance for loss is greater. But if I made the switch would it not make more sense to do so now at the lower share price?

A: In this case, it makes no sense at all.

Share.

About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

1 Comment

  1. Jennifer Rubinstein on

    Not a very helpful response, IMHO. You seem to be assuming that the investor’s only retirement savings are currently held in TSP 2030 and that this allocation is appropriate given his or her retirement time horizon. However, it could be that the L2030 allocation is too conservative given the saver’s expected retirement age and other assets. Perhaps he or she inherited a 100% bond portfolio, for example; or, has substantial assets in a taxable account currently invested in CD’s. The target-date funds seem designed for average risk tolerance but are not one-size-fits-all products. Choosing a fund that will terminate a decade or two further than the year of expected draw-down, could be a prudent overall balancing strategy, given the saver’s and the saver’s family’s circumstances.

Reply To Jennifer Rubinstein Cancel Reply