TSP and life expectancy


Q. I noticed you always say employees should place their money in the L Fund that most closely corresponds to their life expectancy. However, on the TSP website shows you should invest in the L Fund that most closely corresponds to when you will withdraw the money. Can you elaborate on this issue?

A. If you’d like to maximize the sustainable lifetime standard of living that can be supported by withdrawals from your TSP account, I believe that the TSP’s advice will lead you to be too conservative, too early. Imagine the opportunity you’d forego by retiring at 55 and having your entire account in the L Income fund for 40 years!


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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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