PSA: If you are currently invested in L2050, 18% of your funds are allocated in G+F

[solonotsingle]

Like most of you I recently got my Q4/Annual statement. TSP has always been pretty set and forget for me. I was looking over the performance of my folio and felt like it was a little low.

I have about half my allocation in L2050 and the rest in C/S.

The current allocation setting for L2050 is:

• G - 10.42%
• F - 7.83%
• C - 41.22%
• S - 11.92%
• I - 28.61%

There's nothing wrong with this, however with 28 years left to go on this target date fund, almost 19% in G+F seems like a pretty big drag on my portfolio. Little too conservative for my taste.

Also, if you look at the L2055, L2060, etc. graphs for future fund composition (https://www.tsp.gov/funds-lifecycle/l-2050/?tab=composition), it doesn't look anything like the L2050 fund. Example: L2055 in 2027 (you would think would look similar to L2050 currently) has a G+F allocation of ~1%.

TLDR; rebalance your TSP and if you are in a lifecycle fund check the current allocation and make sure you are good with the risk/performance profile.

 

[stas]

@solonotsingle I was in the L Funds for the first few years after they debuted, but when I realized that my pension from the military can be my “safe” money I put all my TSP in the C/S/I. I’ll risk more volatility today for hopefully higher gains when I’m an old fuck.

 

[kitty346]

@solonotsingle The L2050 will gradually get more similar to L2055. A few years ago the FRTIB decided the L funds should be more aggressive (less G and F). So the newly introduced 20X5 and 2060 fund have less in bonds than the older 20X0 funds. Instead of making a big change to get the older funds in line with the new glide path, the older funds are holding steady at the current allocations until they meet the new plan.

 

[kentmathai]

@solonotsingle The L funds are convenient and structured "well" in that they have all of the TSP funds, but the G/F funds still make them too conservative for anyone who has, say, 10 years or less of service and a retirement horizon that is way, way in the future.

Even people with more than 10 years TIS are probably better off just structuring the allocation % with whatever they're comfortable with, given their time until retirement.

I've alternated between 80/20 C/S, 60/40 C/S, and 50/50 C/S over the last few years, and I just rebalance each year if things get too far out of whack. It'd be nice to add the I fund for more diversity, but the I fund returns have been crap for most of the last several years, so I've had no interest there.

 

[annyfins]

@solonotsingle Weird differences between the 2050 and 2055 allocations. 2055 has below 1% total G+F until 2028 and doesn't get to 10% until 2032. 2050 has been at 10% G+F since at 2010.

Seems like L2055 or later L fund would be a better move for anyone who wants a set and forget fund (although should routinely check that composition doesn't change from projected).

 

[sarahac]

@solonotsingle What was your 12 month gain/loss? Mine was 15% gain. I use the 2050 ratio but increase risk with more C+I allocation.

 

[solonotsingle]

@sarahac 12 month gain was 18%. Considering the SP500 returned 27% in that same time, not great. I didn't have everything in L2050 but had the majority of my allocation and contribution set there.

 

[sarahac]

@solonotsingle The last quarterly statement I got was at 35%. Down right unbelievable, so I’m ok with the slump this last quarter.

 

[alisamiam]

@solonotsingle You can always change allocations too! I update mine to the further out funds whenever I can since I'm still active.

 

[jtbrock]

@solonotsingle just manually set your allotments to whatever fund you like. I have mine set at 90% C fund and 10% S fund.

 

[solonotsingle]

@jtbrock Ya I'm just manually balancing my account now. I'll just set a reminder to review it twice a year.

 

[gabriellagarcia]

@jtbrock That’s exactly what I have mine on. I see no reason to invest into any other fund when I won’t be touch that money for 30 plus years. I wish my leadership or the military actually taught us this stuff when we join because I feel like I wasted years in the g and L funds.

 

[cindi4work]

@solonotsingle Just set it out to the L2065 fund