Q. My TSP account distribution percentages are G: 45; F: 5; C: 31; S: 5; and I: 14, all totaling $556,000 and $10,000 in a Roth. The TSP return from the past 12 months has been -0.29. I’m thinking about retiring this year at the age of 62, and I need $25,000 from the accounts plus increases based on inflation for 30 years. I plan to keep TSP in retirement. What changes in allocations do I need to meet these needs? Do I change to L2040?
A. There is no reliable answer to your question. It’s like telling me that you’re driving a Ford Taurus on a cross-country trip and asking me which way you should turn the wheel next. Without the benefit of a lot more intelligence, the best I can do for you is to recommend that you invest your money in the L-Fund that most closely corresponds to your life expectancy and cross your fingers. The maximum safe withdrawal rate will depend entirely on how you make your investment decisions along the way.