Changes coming to the TSP L fund
- By FederalSoup Staff
- Jun 08, 2020
Earlier this month the Thrift Savings Plan announced more new Lifecycle funds will be available July 1.
Instead of five L fund choices, there will now be 10. Each new L fund will have a shorter lifespan, TSP stated, slashed from a decade down to just five years. That way, feds can more precisely target their fund choice to one with a maturity date that coincides closely with their retirement date. It will also save feds from having to split their account between two funds to maintain an acceptable level of risk.
The current L Funds are L 2050, L 2040, L 2030, L 2020, and L Income. The target-date funds automatically adjust as participants gets closer to the time they plan to retire. The L Income Fund, the most conservative of the funds, is for those who have already reached the target date.
The L 2020 Fund, having reached its target date, will now be rolled into the L Income Fund.