L Fund follow-up


Q. Thank you for your answer on my question of investing my 100 percent G Fund into an L Fund. You recommended choosing an L that corresponds to my life expectancy. I expect to retire in about a year, will have about $500,000 outside of the fund after I transfer my 401(k) into the fund.

My FERS will be about $1,000 a month, and I will defer drawing Social Security until after 67, maybe wait until 70 (I am 64).

The issue is life expectancy. Our family tends to live into its 90s. I am thinking that the L2020 may be too conservative in view of this. Would L2030 be more appropriate with the above scenario, or maybe hedge and do half L2020 and half L2030?

My non-TSP funds, I think I will put primarily in a Vanguard-type Lifecycle Fund or 50/50 total stock index/total bond. I’d appreciate your thoughts on this. Also, any recommendations on fee-based financial advisers familiar with planning for people with TSP and outside funds as in the example above?

A. My suggestion was a lowest-common-denominator, do-it-yourself kind of solution if you didn’t know what you should do to best support your goals. Kind of like telling you to fly straight and level if you found yourself at the controls of an airliner at 30,000 feet. This might lead to failure, but without knowing any more about your circumstances, it’s the safest thing to do. Now, it sounds like you want to fine-tune this very general advice like it’s something more. Don’t bother.

If you want to do this right, I can help you. Start by visiting my website at www.variplan.com.


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.

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