L Fund


Q. I don’t understand what you mean by invest in the L Fund based on your life expectancy. My husband plans to retire in 2014 when he turns 62. If his life expectancy is 85 years old, does that mean he should put his money in the L2020 or L2030 Fund? He is still employed, but his Thrift Savings Plan money is in the L  Income Fund.

A. Recommendation to invest in the L Fund that most closely corresponds to your life expectancy (or joint life expectancy with your dependent) assumes that you don’t have the basis for a more suitable strategy. It’s like recommending that you fly a plane straight and level because I have no idea where you are or where you’re going. It’s the safest bet, but there is no assurance that it will get you where you want to go safely. Still, it’s better than recommending that you dive or climb.

Based on the information you’ve provided, you expect your husband to live until 2037, when he is 85 years old, so my rule of thumb would lead him to the L 2040 fund.


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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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