Q. I am 57 years old and relatively new to the federal work force, having been in it three years so far. I plan and frankly need to work until that golden age of 72 1/2. That leaves a whopping 15 years until retirement. I currently invest 80 percent of my contributions to the L2030 and 20 percent to the L2040. I am considering allocations into the L2050 funds. I am, of course, looking for the potentially biggest bang for the buck. What are your thoughts?
Browsing: L-2050 Fund
Q. The L funds such as L2020 are structured toward retirement dates such as 2020. After that date, your funds are moved to the L Income Fund. I’ve seen you mention several times that if you can’t decide how to allocate your funds after retirement that we should consider the fund that matches our life expectancy. Can you explain the reasoning behind this a little more? If I am currently 57, retired and my life expectancy is 85 years of age, are you saying I should consider the L2040 or L2050 funds?
Q. It is often emphasized how important asset allocation is to the success of one’s portfolio, saving or retirement plan; and you emphasize in your “Retirement University” presentations the importance of having an asset allocation on the “efficient frontier.” Are calculators or programs available that allow do-it-yourselfers to determine a risk efficient asset allocation for their portfolio? Do you think the asset allocations in the TSP’s L Funds (i.e., L Income to L 2050) are on the efficient frontier for their level of expected return?
Q. I’d be interested to know your opinion on Dave Ramsey’s TSP advice of 60-80 percent going to the C Fund with the remainder split between the S and I funds. I know you always say without proper knowledge and analysis to select the closest L Fund to your life expectancy, but for young employees the closest fund (2050) for that only puts them in the mid-50s to 60s age range, which seems slightly conservative. Do you think his advice is too risky for youngsters hoping to be TSP millionaires?
Q. I became a federal employee in August 2012. Until recently, I was only contributing three percent of my income, but I was recently promoted and am able to contribute five percent. I have approximately $10,000 in my TSP and would like to retire in about 27 years (at which point, I will be 67). I’ve been contributing 95 percent to the 2040 plan and an additional five percent to the G Fund. Is this too conservative? The TSP is the only retirement account I have. Given the current market climate, what should my fund allocations be? My current salary is $63,722. I hope…