Changing TSP’s L 2020 mix


Q. I’m a federal employee within about 5 years of retirement and am wondering about whether to revise the distribution of funds in the L 2020 fund in which I’m now invested ($127,000 balance). I was just told the rate of return in the G fund (to which the L 2020 fund currently allocates 44 percent) is quite poor and that I should consider reallocating funds out of the G fund — perhaps concentrating on the C, S and I funds. However, I’m aware of the need to invest conservatively with this short time horizon. Under these circumstances, would you advise altering the L 2020 fund’s allocations?

A. Altering the L 2020 fund’s asset allocation is not an option. You may switch to a different L fund or use the TSP’s other five basic funds to change the allocation of your account, however. It is impossible to know which allocation will be best for you from the information you’ve provided. It’s like telling me that you’re at the controls of an airplane and asking me what you should do next. If that’s all I know, I guess I’d tell you to fly straight and level, at a constant speed. It’s the safest bet, given what I know, but it may lead to a bad outcome. To me, “flying straight and level at a constant speed” is investing in the L fund that most closely corresponds to your life expectancy. If you want to have a safe trip to where you want to go, you’ll need to learn to navigate and fly, or hire a trustworthy pilot to do it for you.


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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 and view his blog at

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