C Fund and TSP


Q. I’ve heard that if you have several years before you plan on withdrawing money from you TSP account, that you can invest in a stock fund (such as the C Fund). I have between nine to 11 years before retiring. I already have $400,000 in the L 2040. Would it be a safe bet for the next five years to invest in the C Fund?

A. About 40 percent of the money you have invested in the L 2040 Fund is actually in the C Fund. Money invested in stocks and bonds is never a safe bet. There is always a significant risk that things will not turn out the way you expect. The trick is to minimize that risk through diversification — which the L Funds attempt to do — and to make sure that your retirement plan allows for bad luck in your risky bets.


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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