TSP allocation in retirement


Q. I’m planning to retire as a federal law enforcement officer in March 2016 at age 50. I currently have all of my TSP invested in the L2020 fund. Others at Federal Times have recommended using the Lifecycle Fund that matches your life expectancy versus your target retirement year. I will be taking 72t life expectancy payments from my TSP beginning at age 50. Should I consider moving my TSP into the L2030 or L2040 funds? Is this more likely to make my TSP balance last longer into retirement?

A. I’m the one who has recommended using the L Fund that most closely matches your life expectancy — if you aren’t sure what you should do. The odds are that, if you stick with this strategy, changing L Funds, as necessary along the way, you will be able to enjoy a higher level of lifetime income than if you follow the TSP’s recommendation to use the L Income Fund starting at age 50.


About Author

Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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