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?
A. Moving to the L Income Fund allocation with 30 years of life left will severely reduce the sustainable withdrawal rate your account will support, compared to a more aggressive allocation. Of course, spending — and living — less is always safer, but you can spend more, safely, by accepting a little more market volatility.