G fund vs. L fund


Q. When I retired 5 years ago, I transferred all of my savings to the L Fund that was close to my life expectancy. I’ll be required to start withdrawing the RMD in 2018. With all of the uncertainty going on with the stock market, should I move the money I have left to the safe G Fund or stick with the L Fund for the long run?

A: If the money you have in the account will meet your withdrawal needs for life, without any growth, then you should move it all to the G Fund. If you’ll need growth in the account to support your withdrawal needs, you’ll have to stick with the option that will provide that growth. I expect that, at your age, you’re already in a fairly conservative L Fund allocation. If so, you’ve already avoided much of the risk of loss from market declines.


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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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