Q. I have all of my money in the L Fund 2030. All of the money experts are predicting that the stock market will fall. Should I transfer all of my money to the G Fund, then transfer back when to the L Fund when it nears the bottom? Are there any fees if you transfer? Or should I just ride out the storm and stay where I am? A. Are those “money experts” going to take responsibility for the outcomes you experience if you follow their “advice.” Of course not. So why would you listen to them? Aren’t these…
Browsing: L Fund
Q. I’ve participated in the Thrift Savings Plan since its inception as a CSRS employee and plan to retire next year. My current contribution allocation is 100 percent to the L2020 Fund and has been since that fund was created in 2005. Prior to the creation of the L funds, I had allocated my contributions equally to the C and G funds, which I have left untouched in the account. The account’s present holdings are approximately 50 percent L2020, with the remainder being 25 percent C and 25 percent G Fund. What should I now be doing, if anything, with those…
Q. At age 55½, what is the best L Fund I should put $5,000 in? In five years, what is the expected gain of the $5,000? A. The best fund for you depends upon your unique set of goals, resources and constraints. Anything else is just a guess. Your age is not really a direct factor in making the choice. You’ll find information about the L funds, and suggestions for picking a fund (based on a guess), at www.tsp.gov.
Q. I’m 25 years old, series 1811 and have been contributing 5 percent into the Thrift Savings Plan (FERS) for three years. Until last week, I was contributing 100 percent into the L2040 fund, but now I’m doing 65 percent into the S Fund and 35 percent into the I Fund. Since I still have about 32 years until mandatory retirement, do you think I am making the right TSP choices now, and do you have any recommendations? A. Your allocation is risk-inefficient. You could reconfigure it to deliver similar expected growth with much less volatility. If you don’t know…
Q. On reading some of Mike Miles’ column, I see him advising to invest in the L Fund most closely matching your life expectancy. So is he saying that at 60, I should invest, say, in L2040? Would he recommend this even if/when I begin withdrawing money regularly for retirement income replacement? A. That is what I have recommended you consider doing if you’d like to maximize the standard of living your money will likely support over your lifetime. Of course, if you’re managing your money, you’re ultimately responsible for the outcomes.
Q. I will have approximately $550,000 in my Thrift Savings Plan when I retire this year at age 60. In addition, I have other investments and will be receiving a federal pension. Using a 4 percent investment withdrawal rate and anticipating future Social Security benefits, my income will exceed expenses by 20 percent, so I may dial back the 4 percent to something less. Considering this and with a willingness to accept a moderate amount of risk, what would be an appropriate TSP fund allocation for a younger retired person? A. I can’t tell you what is right for you…
Q. I am 57 years old. I have about a year and three months with the Defense Department (FERS). I am in the process of buying back 14.8 years of service, and I plan to retire in about 12 years. Will the buyback help with the Thrift Savings Plan? What is a good TSP investment option for someone in my situation? A. I’m not sure how the buyback will help your TSP account, since you will not be entitled to any additional contributions as a result. The investment strategy that you choose should be based on more information that you’ve…
Q. You have suggested that individuals invest their TSP funds in the life cycle fund most closely approximating their life expectancy. Would that still apply to a CSRS employee who does not anticipate accessing funds until age 70½? A. Yes, but keep in mind that this was my advice to those who are not sure what else to do.
Q. At age 65, I’ve taken your advice and have taken a full physical. I’m being very positive and very optimistic when I say I expect to be around for another 15 or 20 years. In retirement, I’ve put all of my money in the L-2030 fund, as suggested. Does it stay in the L-2030 fund when I reach the required minimum distribution age, or does it get put in the L-income fund? A. The management decisions are up to you, but my default recommendation, if you don’t know what else to do, is to continue to use the L…
Q. I am 37 years old, invested 100 percent in L2030. I have 25 years left to work, and I’m happy with 5 percent growth. I’m afraid of sequestration effects, so I’m planning to move 100 percent into G fund this week. I will move it back into L2030 after sequestration, when it posts three months of positive share price gain. Good plan or bad? A. Bad.