Switching funds


Q. I am 52, and I have all my TSP money in the C Fund: $187,000. I probably will not retire until 62 or 65, and by that time I will have 30 years of government service. Which L Fund should I switch to, and should I make a lump-sum move now?

A. This is like asking how you should fly a plane when all I know is that you’re in a Boeing 767 somewhere over Kansas. The right investment strategy for you will depend upon a number of factors and the margin for error can be quite slim. In addition to information about your life expectancy and dependents, I’ll need to know how much money you expect to need from your account each and every year you, or your dependents, are alive to figure out a solution. Even then, knowing how the investment decisions will be made along the way is a critical factor. The right portfolio under one management approach might fail under another. Without the necessary information and analysis to figure all of this out, I think the best you can do is to choose the L Fund that most closely corresponds to your life expectancy. You need to understand that this is like telling you to fly that plane straight and level. It might not work out, but it’s the safest bet under the circumstances.


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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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