By Mike Miles
September 29th, 2014 | Investing
Q. I heard someone mention the 2020 fund and that they also invest normally. All I can figure is that she invests in the L2020 fund. Is that possible, and how does that work? I did not think you could have a regular investment like the G and C fund, for example, and still have and L fund.
A. You may allocate all or a portion of your account to one or more of the L Funds, just like any of the basic TSP funds.
September 3rd, 2014 | L Fund
Q. I’m a 40-year old mailman with 17 years service. I plan on leaving the post office when I hit 52 (30 years service). I understand I need to leave my TSP alone until 55 without penalty. My house will be paid off before I’m 51. I plan to work part-time with less stress after 52. I have $91,000 in traditional TSP now ($15,000 in L2030), the rest in G fund. I just switched from 10 percent to 15 percent payroll withdrawal. Should I change my contribution to 100 percent going into L fund, or remain with my current 70/30 split in favor of the G fund? Read the rest of this entry »
August 22nd, 2014 | L Fund
Q. You recommend that if we do not feel comfortable managing our TSP, we should invest in the L Fund that most closely corresponds to our life expectancy. However, the L Funds are named for the year we expect to start withdrawing money, not the year we expect to expire. I expect that I will not be withdrawing much money the year I expire, and certainly none afterwards. So why do you word your advice that way? Read the rest of this entry »
August 15th, 2014 | L Fund
Q. I started working for the government about 2-1/2 years ago. I am 56 and plan to retire in 10 years. I am contributing 15 percent of my pay to the TSP G fund. I want to earn more than this fund is paying. What are your recommendations on which fund I should contributing to?
A. If you don’t know what else to do, then about the best thing I can suggest is that you use the L Fund that most closely corresponds to your life expectancy. You won’t know how much spending this will safely support, but at least you’ll know that your account is risk-efficient.
June 17th, 2014 | TSP contribution
Q. I’m 53 with 30 years of government service. I’m invested at 15 percent to TSP. Looking at my account, I feel I am not going to have enough money in my TSP to retire comfortably. I have 6-1/2 years until I can retire without penalty to TSP. What can I do to maximize my investment?
A. I suggest that you contribute as much as you can and direct all of your current and future investments to the L Fund that most closely corresponds to your life expectancy. If you’d like more certainty in predicting and producing the outcome of your retirement plan, you can review the information provided at www.variplan.com. My ongoing help is trustworthy and cost effective for most feds with $100,000 or more in savings and investments.
February 20th, 2014 | Uncategorized
Q. I work for the Defense Department. I have $75 biweekly going into the G Fund. I am in my early 30s and want to build my money. I don’t see it moving much in the G Fund, and I have been investing for four years. I can afford to invest $100 biweekly but don’t know what fund to put my money in for it to grow. My annual income is $38,780.
A. Given your circumstances, I suggest that you invest all of your Thrift Savings Plan money in the L 2050 Fund for the foreseeable future.
February 10th, 2014 | Uncategorized
Q. I have 14 years of federal service and have always been in the C Fund 100 percent, currently with $230,000. For the past few years, I’ve contributed at 15 percent. I was not very attentive to my Thrift Savings Plan and, after 2008, was leery of moving after the big losses and getting into L2030. In 2013, the C Fund was amazing, but 2014 has been way down so far. How do I know the right time to transfer the whole thing to an L Fund, and is that the right thing? I will probably retire by 2035.
A. Your current asset allocation scheme is risk-inefficient. You should move to the appropriate risk-efficient asset allocation scheme, using all five of the TSP’s basic funds, as soon as possible.
January 27th, 2014 | Uncategorized
Q. In your recent column “4 keys to TSP success,” you mentioned, regarding asset allocation, to “diversify your holdings among cash, stocks and bonds to hedge the risk lower.” I agree with this approach wholeheartedly, but ask where in the TSP to keep “cash”? There is no money market option, just the L funds (which I don’t use, preferring to personally allocate my investments), and the G, F, C, S and I funds.
By the way, I took everything out of the G Fund and ceased all future allocations to it when there was a proposal by our leaders last year for the federal government to be able to borrow against it. Do you have any update or comment on this proposal?
A. The G Fund is a cash equivalent with an above-market rate of return. It’s as safe as anything you’ll find.
January 22nd, 2014 | Uncategorized
Q. I’m 33 years old and have been in the federal government since 2004. I own a house and max out my Thrift Savings Plan every year into the L2040 fund. Can I be more aggressive with my allocations? I won’t be able to retire until at least 2034.
A. You can be more aggressive, but I can’t tell you if you should without the benefit of more information and some solid planning and analysis. The allocation you use should depend entirely on your unique resources, goals and circumstances.
January 6th, 2014 | Uncategorized
Q. When I retire in two years at age 62, I would like to take a fixed monthly payment out of my Thrift Savings Plan. Can I still leave the balance in the L Fund and earn the rate that the L Fund is earning?