Q. I am 62, have only been with the government for five years, and have $50,000+ in the G fund.
I changed my contribution to 50 percent of salary from 25 percent and plan to work as long as I can, but I have health issues. I plan to leave the money in the TSP after retirement, and realize the G fund is too conservative. (I have been expecting a stock market crash but it looks like the fed will continue the zero or near-zero interest-rate policy). I am thinking about transferring all into the L2020 because it is conservative and allows for more growth. What would you recommend with a life expectancy of 75-80?
A. Without the proper information, understanding and analysis, it is impossible to know what is best. You have determined that the G Fund is too conservative. Your question should be: “How much risk do I need to take to achieve my long-term lifetime financial goals?” That’s how much risk you should consider taking. Without that knowledge, I suggest that you use the L Fund that most closely corresponds to your life expectancy – the L 2030 Fund in your case. Of course, this is like recommending that you fly an airplane straight and level. It’s the prudent thing to do without more information, but that doesn’t ensure that it will work out well in the end.