TSP 2030 L Fund

The TSP website The TSP website describes the basic initial portfolio structure of their 2030 L Fund. This is considered an "moderately aggressive" portfolio mix, and TSP is currently targeted to those TSP'ers who are expecting to start drawing down their accounts on or before 2030.

The mix is aggressively slanted to the TSP stock funds and closely matches the more typical "32/69" (bond/stock) mix lifestyle portfolios available for investors in other 401k plans. Offering a "moderately aggressive" mix of stock and bond funds, the 2030 L Fund might appeal to those investors who are optimistic about the future of the stock market and willing to accept a "moderately aggressive" level of market risk in TSP stock funds to reach retirement goals.

You can immediately see how aggressive (and risky) this 2030 L Fund actually is. With only a 1 percentage point increase in performance over the less aggressive 2020 L Fund you pay for that insignificant added return by suffering a ~39% account draw down Maximum % Draw Down several times over the 28 year history! Those are very significant and discouraging draw downs. In fact the market risk is over 150% higher than that for it's sister, the Income L Fund, while increasing the performance only slightly.

The TSP Pilot Standard Portfolio, over the same period, provided a greater return with 77% less market risk (Ulcer Index) and 78% less draw down (Maximum % Draw Down) of the 2030 L Fund.

Our basic timed 2030 L Fund alternative improved the return while cutting the market risk exposure by nearly 80%! In fact the long term timed 2030 L Fund risk adjusted performance, as measured by the Ulcer Performance Index, was nearly three times the performance of the standard 2030 L Fund! Again, professionally timed funds always reduce risk exposure and usually improve return as well--you get more "bang-for-the-buck."

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