Q. I’m retired and will be 61 in May 2020. My allocations are 25 percent C Fund, 50 percent I Fund, and 25 percent L2020. I also have $9,000 sitting in the S Fund. Should I move the 25 percent in the L2020 and the $9,000 in the S Fund to L2050? Not sure what to do with the C & I Funds. A. If you don’t know what to do, I suggest that you put your balance into the L Fund that most closely corresponds to your life expectancy.
Browsing: L-2050 Fund
Q. I understand how and why the L funds such as the 2020, 2030 and 2040 adjust themselves as you get closer the target date. I don’t understand why the L Income Fund adjusts itself, since isn’t it the consistency of the Income Fund that retirees are after? A. The stated goal of the L Income Fund is “to achieve a low level of growth with a high emphasis on preservation of assets.” I can’t tell you why they decided to use this method to achieve this goal, since it isn’t necessary, but that’s the way it is. Remember that…
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…
Q. I am wondering how Lifecycle Funds value are determined. For instance, the L2050 Fund is less expensive than the L2020 Fund and the L2050 is the more aggressive fund meaning it has a higher percentage of C, I and S. I don’t understand how this works. Additionally, I tabulated each of the L funds by taking the percent allocation multiplied by the cost of the fund and it is less expensive for me to allocate the same percentages of any of the L funds (outside of L2050) directly versus the subsequent L fund. For example, as of this [April…
Q. I currently have $165,000 in my TSP in the L30 fund. Should I leave it there for my remaining nine years or switch to the C Fund for more growth?
Q. You state that anyone who invests in the TSP should invest in the fund that corresponds most to their life expectancy if not sure of how to allocate among the C, S, I, F, G funds. Does this hold true if I retire at 55 and access the funds in my TSP immediately? After all, L2050 fund is for those that will access their TSP in 2045 or later, at least that’s what it says on the TSP site.
Q. Just for clarification, when you say “I suggest that you invest your account in the L Fund that most closely corresponds to your life expectancy,” you mean the fund that most closely corresponds to the year of your expected end of life, not the number of years until your end of life, right? In other words, if I expect to live 30 more years (or until 2047), I would invest in the L2050 fund, as opposed to the L2030 fund?
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?
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?