The Thrift Savings Plan (TSP) is launching the new fund on July 26, 2024. It is designed for federal employees who were born after 2004 because of its 2070 target date. There will be 11 Lifecycle funds total with the introduction of the L 2070 Fund.
TSP participants will have will have eleven Lifecycle (L) Funds to choose from instead of the ten currently available.
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“You can consider investing in the L 2070 Fund,” the TSP announced in a statement last month, “if you plan to begin withdrawing from your TSP account in 2068 or later, or if you were born after 2004. Each of the eleven L Funds allow you to target the time when you think you’ll need your money.”
Each of the L Funds is a diversified mix of the five individual funds (G, F, C, S, and I). They were designed to let particpants invest their entire portfolio in a single L Fund and get the best expected return for the amount of expected risk that is appropriate for the participant.
According to the TSP, every quarter (three months), the target allocations of all the L Funds except L Income are automatically adjusted, gradually shifting them from higher risk and reward to lower risk and reward as they get closer to their target dates. 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, which generally keeps the same target allocation. For example, in 2025, the L 2025 Fund will be rolled into the L Income Fund.
