E-5, 9 years, 30% going to TSP should I change anything about my contributions

[mrogers]

Hey everyone since the new year had started I wanted to know if I should change anything around for my tsp. The link below is a picture of my TSP.

https://imgur.com/a/mS5YQaN

 

[hamerek]

@mrogers 30% is impressive. When are you looking to retire? You've selected a target date fund that indicates you're aiming to retire around 2030. Is that accurate?

 

[mrogers]

@hamerek 2032-35 is what I am looking at for retiring. I've read that for the L fund should be around the time I was looking to retire but I also read invest in the cheaper L funds in the hope they go up, not sure what is better.

 

[monroedm]

@mrogers Your L fund should be set to when you plan to start taking withdrawals from it. Not your retirement from service. My opinion.

 

[mrogers]

@monroedm Oh dang, okay so I should shoot for the 2045 fund.

 

[monroedm]

@mrogers I would set it to whenever you are close to 60/65 years old. I would also move all your funds over as mentioned by another person. The CSI funds are fine if you want to manage it a little. If not just move everything to L and let it do it’s thing

 

[mrogers]

@monroedm Wow, thanks a lot guys it is good to know I haven't really messed things up.

 

[winter_rose]

@mrogers It's better than having everything in the g fund but yeah you're missing out on a ton of gains because half your portfolio is in the g fund.

 

[resjudicata]

@mrogers This was what I was told as well.

 

[sharong]

@monroedm Yup. When you reach the age of retirement (59.5?) not the year you retire from the AF.

 

[hamerek]

@monroedm Definitely. From TSP.gov:

When an L Fund reaches its target date, it goes out of existence and any money in it becomes part of the L Income Fund.

You definitely don't want it to switch to L Income (which will lose money vs. inflation) before you want to withdraw from it.

 

[holywalk]

@mrogers The "cheaper" notion isn't accurate. It doesn't matter what the price of it is right now. $1 is $1 invested. Don't look at the price of the fund.

 

[hamerek]

@mrogers As the other commenter indicates, you should choose a Lifecycle Fund based upon when you will begin withdrawing from it, not based upon your military retirement date. If that's still 2032-35, so be it. But I would shift all your money towards it. It balances automatically based on your retirement date, so allocating money in other funds kind of undermines that.

 

[mrogers]

@hamerek I know everyone is recommending I move all my funds to the correct L fund now, but would it be fine if I just move my current L funds to the new one, leave all the other funds alone, and make my new L fund allocation to 100%?