Q. I am 47 years old with 23 years in federal law enforcement. I will be eligible for retirement in two years at 49 years old, in the year I turn 50, so I will be eligible to draw from my TSP without penalty immediately. I have over $500,000 in my TSP. My decision to draw will be based on possible employment opportunities and income post-retirement. But if possible, I would like to minimize my impact on the balance. I know you have previously advised placing money in the L Fund closest to your life expectancy if you are unsure what to do. Is there any advantage of splitting the balance between L Funds – for example, 50 percent in 2020 (lower risk for money I need soon) and 2050 (higher risk for money to last down the line)?
A. This is a reasonable approach if you know that you’re going to need a significant withdrawal from your account at a certain time, as opposed to regular, level income.