Q. I am 38 years old with 15 years of government service as a GS-14. I hope to work no more than 20-22 more years, assuming age 60 will give me the maximum benefit. My TSP allocations are where my concerns lie. I am blindly diversifying my account as follows: G Fund at 10 percent; F Fund at 0 percent; C Fund at 50 percent; S Fund at 30 percent; I Fund at 10 percent.
I have no allocations in the L Fund. I am contemplating having future earnings go into the L2040 fund. Would you recommend this, and how much percentage would be worthwhile? I usually don’t move money I already have earned, but rather change allocations for future earnings. Do you agree that is the best approach? My current balance is $228,000.
A. If you’re not sure how best to allocate your account to support your goals, I recommend that you invest your account in the L Fund that most closely corresponds to your life expectancy until you figure it out. This should produce better risk-adjusted returns than guessing at percentages.