The Thrift Savings Plan (TSP) Lifecycle Funds (L Funds) automatically divide your contributions among different combinations of the five core funds: the G, F, C, S, and I funds. The ratio of your investment is adjusted quarterly to get the best expected return for the amount of risk that’s appropriate. As you get closer to retirement the adjustments gradually shift to more conservative investments to lower your risk exposure.
The Advantages Of The TSP L Funds
For participants who aren’t interested in managing their TSP allocations, the Lifecycle Funds are like setting your investments on auto-pilot. Add to this L Fund fees are among the lowest you’ll find. Each L Fund is named after its target date, and the mix of individual funds is called the target allocation. The later the target date the more aggressive the target allocation. For example — the L 2030 is for TSP participants who plan to start withdrawing money within a few years of 2030. When an L Fund reaches its target date, it’s phased out and the balance becomes part of the L Income Fund.
You Can Invest Any Part Of Your TSP In One Or More Of 11 Lifecycle Funds:
- L Income: When you’re already withdrawing from your TSP, or you were born before 1960.
- L 2025: When you plan to withdraw from your TSP between 2025 and 2027, or you were born between 1960 and 1964.
- L 2030: When you plan to withdraw from your TSP between 2028 and 2032, or you were born between 1965 and 1969.
- L 2035: When you plan to withdraw from your TSP between 2033 and 2037, or you were born between 1970 and 1974.
- L 2040: When you plan to withdraw from your TSP between 2038 and 2042, or you were born between 1975 and 1979.
- L 2045: When you plan to withdraw from your TSP between 2043 and 2047, or you were born between 1980 and 1984.
- L 2050: When you plan to withdraw from your TSP between 2048 and 2052, or you were born between 1985 and 1989.
- L 2055: When you plan to withdraw from your TSP between 2053 and 2057, or you were born between 1990 and 1994.
- L 2060: When you plan to withdraw from your TSP between 2058 and 2062, or you were born between 1995 and 1999.
- L 2065: When you plan to withdraw from your TSP between 2063 and 2067, or you were born between 2000 and 2004.
- L 2070: When you plan to withdraw from your TSP account in 2068 or later, or you were born after 2004.
To learn more, connect with an FRC® trained advisor.
Source: https://www.tsp.gov/publications/tsplf14.pdf
