Q. I’m a widower retired on CSRS with a pension that provides me with enough to live on. I’ll turn 70½ in 2012 with about $200,000 in my Thrift Savings Plan. Starting in 2012, I plan to take the required minimum distribution from my thrift plan each year. The question is how to allocate my money in TSP — which plans to put my money in.
A. The answer depends upon your goals for the money, and how important it is that it achieve those goals. Your question is like asking which way you should turn the wheel in a car, and only telling me what kind of car you’re driving and how old it is. In order to answer the question responsibly, I’d have to know a lot more information and do a lot more planning. Where do you want to go? Where are you now? How much time do you have to get there? Are you planning to stop on the way? What are the weather conditions likely to be along the way? Etc., etc. etc. Sure, I could say: “Turn the wheel to the right,” but this wouldn’t really be reliable and responsible.
Without the proper planning analysis, your best bet is to use the TSP’s L Funds. This is not a great solution, but it’s better than nothing. You’ll find information and instructions at www.TSP.gov. Click the link to L Funds. Just keep in mind that this a set of generic driving instructions without any clear end in mind.