Q. I sent an e-mail about two months ago asking a question about my TSP account. I’ve been working as a General Schedule employee for about 4½ years. I have all my money invested in one fund (the I Fund). I don’t want to work much longer and was wondering if it would be best if I divided it into three different funds. The S Fund, the I Fund and the C Fund. I checked and didn’t see a question along this line. Your advice in this matter would be greatly appreciated. Thanks.
A: I did provide an answer to this question and am not sure why you didn’t receive it. I’m asked about how to invest all the time and the answer is always the same: There is not one-size-fits-all solution. Your investment strategy should be selected for its ability to meet your particular goals. These goals will need to be first translated into a series of cash flows that will affect your account.
If you’re not sure how to invest your money — and are unwilling to find someone to help you who is — then you might want to use one of the TSP’s L Funds. This is a less than optimal solution, but probably much better than the inefficient allocation you’re currently using. Your one fund allocation has subjected you to unnecessary risk without commensurate return.