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"Reasons Why TSP Lifecycle Funds are Poorly Performing"


Please Like, Comment, and Share my videos! 🔔 SUBSCRIBE HERE 🔔 Check out my complete playlist on TSP investing: 👇 👇 Watch My Other Videos Here 👇 👇 ★ Know Your TSP - The Thrift Savings Plan Investment Funds G/F/C/S/I ★ GET OUT of the G Fund - Maximizing Your TSP ★ ROTH TSP vs Traditional TSP - Which is Better? 📷 📷 My YouTube Equipment 📷 📷 ► My Camera 👉 ► My Wide-Angle Lens 👉 ► My Shotgun Microphone 👉 ► My Lighting 👉 ► My Light Diffusers 👉 ► My Tripod 👉 ================ 📚 📚 Books That Changed My Life 📚 📚 📗 How to Win Friends & Influence People 👉 📕 Dumbing Us Down 👉 📘 Quiet - The Power of Introverts 👉 📒 A People’s History of the United States 👉 ================ At present, the are five Lifecycle Funds offered through the government Thrift Savings Plan: L 2050, L 2040, L 2030, L 2020 and L Income. Five more L Funds will be created soon. When a new lifecycle fund is created, it starts out with about 80% in stocks and 20% in bonds and then at the age of retirement, it will stop adjusting once it is 80% in bonds and 20% in stocks. The F Fund and G Fund are bonds and the S Fund, C Fund, and I Fund are stocks. At present, the L 2050 Fund is made up of: [G Fund = 11.14%] [F Fund = 7.86%] [C Fund = 42.76%] [S Fund = 13.94%] [I Fund = 24.30%] The L Income Fund is made up of: [G Fund = 74.00%] [F Fund = 6.00%] [C Fund = 11.20%] [S Fund = 2.80%] [I Fund = 6.00%] Why is this investment strategy bad? It is because it does not serve your specific needs. It is a one size fits all for ALL government employees. It does not factor in your ability to deal with volatility in your portfolio, your income and growth needs, the value of your assets outside of your retirement account, your allocations in other investment accounts, your tax minimization strategy, and your time horizon (time period over which you are investing). Lifecycle funds also begin with 20% in bonds. If someone is investing for over 30 years, then they should be in stocks to earn a higher return. Because the average person is so risk adverse, the fund administrators are deliberately and extremely conservative with their fund allocations. Being in the G Fund is bad because there are some years it does not even outperform inflation. Every year inflation can be between 2-4% and if the G Fund cannot earn that, people are net losing money in real dollar purchasing power. Lifecycle Funds also undercut your stocks' performance when the economy is good. Because the percentages in the funds are fixed, your stocks actually have to be sold as they increase in value in order to purchase more shares of the G Fund in order to keep the fixed percentages of the L Fund constant. This is a terrible investment strategy to not let each fund perform on its own and let compound interest work in your favor over time. ================ 💯 LET’S CONNECT 💯 📷 Instagram @JakeBroe 👉 ================ #ThriftSavingsPlan #GovernmentTSP #TSPLifecycleFunds ================ DISCLAIMER: This video is for entertainment purposes only. I am not in any way acting as an agent or representative of the Department of Defense or United States Federal Government when presenting this information. I am not a legal or financial expert or have any authority to give legal or financial advice. While all the information in this video is believed to be accurate at the time of its recording, realize this channel and its author makes no express warranty as to the completeness or accuracy, nor can it accept responsibility for errors appearing in this video. ADVERTISER DISCLOSURE: Jake is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to www.amazon.com. Additionally, other referral links are included and this channel does receive compensation for sending traffic to partner sites. Shopping through our links is an easy way to support the channel and we appreciate and are super grateful for your support! L 2050, L Funds, the worst tsp fund, tsp lifecycle funds, thrift savings plan lifecycle funds, tsp l fund, the lifecycle funds, L 2030, L 2040, tsp funds explained, TSP, Thrift Savings Plan, military retirement, government retirement, retirement planning, TSP Investment options, federal retirement, financial planning, blended retirement system, c fundamentals for absolute beginners, tsp strategy, tsp tips, government tsp, c fund, thrift savings plan, Tsp investing...(read more)



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TSP Lifecycle Funds are Terrible – Here is Why TSP Lifecycle Funds are a popular investment strategy among federal employees, but they may not be the best choice for long-term retirement planning. These funds are designed to automatically adjust your investment mix based on your target retirement date, simplifying the process of asset allocation. However, there are several reasons why these funds are not the best option for investors looking to maximize their returns and minimize risk. One of the main drawbacks of TSP Lifecycle Funds is that they are not tailored to individual investment goals, risk tolerance, or asset allocation preferences. Instead, these funds are designed to follow a one-size-fits-all approach, with pre-determined asset allocation ratios. This means that investors may end up with a less-than-optimal mix of investments depending on their individual circumstances. Another issue with TSP Lifecycle Funds is that they are too conservative for younger investors who have a longer investment horizon. These funds are designed to gradually shift from stocks to bonds as the investor approaches retirement age. For younger investors who have decades to ride out market fluctuations, this can result in missed opportunities for higher returns. Instead, younger investors may be better served by more aggressive investment strategies that have a higher allocation to equities. Furthermore, TSP Lifecycle Funds are not as customizable as some other investment options. These funds only have five target retirement dates, spanning from 2020 to 2065. For investors who want a more tailored approach, this limited range of options may not provide enough flexibility. Finally, TSP Lifecycle Funds have higher expense ratios compared to other investment options available in the TSP. These fees can eat into your returns over time, meaning that you are paying more for the convenience of automatic asset allocation. In conclusion, while TSP Lifecycle Funds may offer the convenience of automatic asset allocation, they may not be the best choice for investors looking to maximize their returns and minimize risks. These funds may not take into account individual investment goals, risk tolerance, or asset allocation preferences, and may be too conservative for younger investors with a longer investment horizon. Additionally, the limited range of target retirement dates and higher expense ratios may not provide enough flexibility or value for investors. As with any investment decision, it is important to do your homework, consider your individual circumstances, and consult with a financial advisor before making a final decision. https://inflationprotection.org/reasons-why-tsp-lifecycle-funds-are-poorly-performing/?feed_id=89874&_unique_id=644211b75cfad #Inflation #Retirement #GoldIRA #Wealth #Investing #blendedretirementsystem #cfund #cfundamentalsforabsolutebeginners #federalretirement #Finance #governmentretirement #governmenttsp #investing #L2030 #L2040 #L2050 #LFunds #militaryretirement #thelifecyclefunds #theworsttspfund #thriftsavingsplan #thriftsavingsplanlifecyclefunds #tsp #tspfundsexplained #tspinvesting #tspinvestmentoptions #tsplfund #tsplifecyclefunds #TSPmillionaire #tspstrategy #tsptips #ThriftSavingsPlan #blendedretirementsystem #cfund #cfundamentalsforabsolutebeginners #federalretirement #Finance #governmentretirement #governmenttsp #investing #L2030 #L2040 #L2050 #LFunds #militaryretirement #thelifecyclefunds #theworsttspfund #thriftsavingsplan #thriftsavingsplanlifecyclefunds #tsp #tspfundsexplained #tspinvesting #tspinvestmentoptions #tsplfund #tsplifecyclefunds #TSPmillionaire #tspstrategy #tsptips

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