Tips for investing in TSP's L Fund

Monday - 3/21/2011, 3:58pm EDT

Tom Trabucco, director of external affairs, Federal Retirement Thrift Investment Board

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Starting in February, you had the option to start investing in the Thrift Savings Plan's L-2050 Fund.

The L Funds are asset allocators that take the five core funds and balance your risk and and return ratio everyday based on your time horizon, said Tom Trabucco, director of external affairs for the Federal Retirement Thrift Investment Board, which oversees your TSP.

Feds should invest in the L Fund year that best reflects when they think they will withdraw their funds - not necessarily when they think they will retire, Trabucco said.

Trabucco also said feds who have only some of their investment in the L Fund and the rest in individual funds might want to reconsider their investment. Because the L Fund pulls from the five different funds, having "one foot in the L Fund and one in an individual fund ... might be working against yourself a little bit," he said.

Learn more about the L Funds.