TSP Lifecycle funds getting less conservative

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LinusP
Posts: 67
Joined: Fri May 18, 2018 10:29 am

TSP Lifecycle funds getting less conservative

Post by LinusP » Thu Nov 29, 2018 11:48 pm

An email I got from the Thrift Savings Plan (TSP) today:
We are planning adjustments to the L Funds in an effort to improve your investment outcomes. Effective in January 2019, we will increase exposure to international stocks (the I Fund) from 30% to 35% of the overall stock allocation in all L Funds. The L Income Fund stock allocation (C, S, and I Funds combined) will increase from 20% to 30% over a period of up to 10 years. The L 2030, L 2040, and L 2050 overall stock allocations will hold steady for a period of years before resuming their transitions from stocks to bonds. In addition to improving investment outcomes, this pause will align the L 2030, L 2040, and L 2050 Funds with the L 2060 Fund, which will be introduced in 2020 with an initial stock allocation of 99%. Visit Lifecycle Funds to learn more.
Seems like a welcome change to me. I shifted out of the Lifecycle funds in part because they were more conservative than I really wanted to be.

gtwhitegold
Posts: 266
Joined: Fri Sep 21, 2012 1:55 pm

Re: TSP Lifecycle funds getting less conservative

Post by gtwhitegold » Fri Nov 30, 2018 7:03 am

Yes, and with the coming change of the I fund to ACWI ex US IMI, it is almost a set it and forget it portfolio.

My 2 complaints about it after the change are mostly preference and one will be extremely unlikely to be implemented in any by any fund provider.

First is that the Lifecycle funds are still glide to and not glide through portfolios. Meaning that they stop changing once you reach your planned retirement age.

Second is the one that would be difficult to implement and is unlikely to ever happen for any fund. That is to have a preference for stocks in the Roth TSP and bonds in the Traditional TSP. I imagine that Betterment and Wealthfront already have something like this, but I doubt that any major 401k provider does.

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Random Musings
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Re: TSP Lifecycle funds getting less conservative

Post by Random Musings » Fri Nov 30, 2018 9:22 am

In addition to improving investment outcomes, this pause will align the L 2030, L 2040, and L 2050 Funds with the L 2060 Fund, which will be introduced in 2020 with an initial stock allocation of 99%.
Almost sounds like a guarantee. For the long-term, I will go with that, but over a 10-yr period or less who's to say?

RM
I figure the odds be fifty-fifty I just might have something to say. FZ

gtwhitegold
Posts: 266
Joined: Fri Sep 21, 2012 1:55 pm

Re: TSP Lifecycle funds getting less conservative

Post by gtwhitegold » Fri Nov 30, 2018 11:46 am

I agree, but if you really use it as intended and don't look at it until 2060 (or other set end date), you should be good.
Random Musings wrote:
Fri Nov 30, 2018 9:22 am
In addition to improving investment outcomes, this pause will align the L 2030, L 2040, and L 2050 Funds with the L 2060 Fund, which will be introduced in 2020 with an initial stock allocation of 99%.
Almost sounds like a guarantee. For the long-term, I will go with that, but over a 10-yr period or less who's to say?

RM

megabad
Posts: 828
Joined: Fri Jun 01, 2018 4:00 pm

Re: TSP Lifecycle funds getting less conservative

Post by megabad » Fri Nov 30, 2018 1:54 pm

Interesting. Thanks for posting.

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Gelsomina
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Re: TSP Lifecycle funds getting less conservative

Post by Gelsomina » Fri Nov 30, 2018 4:50 pm

I've been tracking the details on the L Fund allocations/glide paths for a long time and prior to the announcement of the glide path changes. It was tedious but I collected the quarterly allocations in the L2030, L2020, and L Income into a spreadsheet because I wasn't happy with the L2020 glide path; it was too conservative for me retiring in 2022 based on what I like to see in my Vanguard IRA glide path. My aim was for a 70/30 mix at retirement.

The L Income was set with allocations of "bonds" (for lack of better word) 80% and stocks 20%. The L2020 and L2030 were comparatively about 10% more conservative that I wanted as well. So my solution was a combined L2020/L2030 blend to achieve a glide path with a resultant 70/30 mix for my personal retirement timeframe thrown in (April 2022).

I thought that the changes to the Lifecycle Funds would be good, but it's actually destroyed the traditional concept of glide paths because they're implementing them over a long period of time. This morning I collected the new quarterly allocation percentages for the L2030, L2020, and L Income for January 2019 and beyond.

And now I understand why they did NOT mention the L2020 in any of those information releases. It's not a gradually down-sloping path, it's a weird mogul path. It's still too conservative maintaining the old glide path from January 2019 to July 2020, then starts increasing risk October 2020 to April 2028. It stays too "low risk" early on then increases risk too late (increases risk the in retirement).

The L Income has slowly increasing risk. I sense that maybe there's some issue that makes easing into higher risk make sense when you're no longer putting new money into the TSP, and not in the workforce?

I'm still in the workforce, have the option of staying there past my target of April 2022, and still putting new money into the TSP. It doesn't really make sense for me to put my money in the new L2020 with that weird mogul glide path, or a combination L2020/L2030, or the L2030.

I guess that means I need to go back to creating my own "lifecycle" by directly investing in the G,F,C,S,I. It is a huge pain in the butt because I cannot fine tune allocations (TSP only allow whole percentages), and then I have to be messing around with it at least quarterly if not monthly or every paycheck in order to maintain my glide path. That feels like timing the market or at least gives me the anxiety of market timing. And I worry looking at it or touching allocations that often will be a huge temptation to start playing games instead of sticking to my plan.

Also, I find it extremely irritating that they elected to boost all I Fund allocations in the Lifecycles in January 2019 without providing information on whether or not the proposed changes to the I Fund are in place or not. Are we just supposed to assume the changes will be in place because they increased the allocations by 5% across all Lifecycle Funds? [I Fund will supposedly stop tracking the Morgan Stanley Capital International Europe, Australasia and Far East Index (MSCI EAFE) in 2019 and will begin tracking the Morgan Stanley Capital International All Country World Ex-US Investable Market Index (MSCI ACWI Ex-US IMI)]. I don't want to boost my I Fund allocation when it might still just be the MSCI EAFE.

QUESTIONS:
Did the TSP Board think it would be too much of a shock to everyone and the system to just warn everyone in advance that they were going to go to corrected allocations all at once in January 2019? Is there some kind of good reason to slowly ramp up? If there is a good reason, the TSP Board is not sharing it with us.

Anyway, here are the old L2020 and L2030 glide paths, and the new ones:

old L2020 glide slope prior to Jan 2019
Qtr G F C S I "Bonds" Stocks Total
Jan-17 52.94% 6.06% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-17 54.30% 6.20% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-17 55.68% 6.32% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-17 57.08% 6.42% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-18 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-18 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-18 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-18 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-19 64.70% 6.30% 16.12% 4.18% 8.70% 71.00% 29.00% 100%
Apr-19 66.25% 6.25% 15.30% 3.95% 8.25% 72.50% 27.50% 100%
Jul-19 67.80% 6.20% 14.48% 3.72% 7.80% 74.00% 26.00% 100%
Oct-19 69.35% 6.15% 13.66% 3.49% 7.35% 75.50% 24.50% 100%
Jan-20 70.90% 6.10% 12.84% 3.26% 6.90% 77.00% 23.00% 100%
Apr-20 72.45% 6.05% 12.02% 3.03% 6.45% 78.50% 21.50% 100%
Jul-20 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Oct-20 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Jan-21 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%

old L2030 glide slope prior to Jan 2019
Qtr G F C S I "Bonds" Stocks Total
Jan-17 31.21% 6.04% 34.14% 9.78% 18.83% 37.25% 62.75% 100%
Apr-17 31.44% 6.19% 33.95% 9.71% 18.71% 37.63% 62.37% 100%
Jul-17 31.67% 6.33% 33.76% 9.64% 18.60% 38.00% 62.00% 100%
Oct-17 31.91% 6.47% 33.56% 9.57% 18.49% 38.38% 61.62% 100%
Jan-18 32.16% 6.59% 33.37% 9.50% 18.38% 38.75% 61.25% 100%
Apr-18 32.42% 6.71% 33.18% 9.43% 18.26% 39.13% 60.87% 100%
Jul-18 32.69% 6.81% 32.99% 9.36% 18.15% 39.50% 60.50% 100%
Oct-18 32.96% 6.92% 32.79% 9.29% 18.04% 39.88% 60.12% 100%
Jan-19 33.25% 7.00% 32.60% 9.22% 17.93% 40.25% 59.75% 100%
Apr-19 33.54% 7.09% 32.41% 9.15% 17.81% 40.63% 59.37% 100%
Jul-19 33.84% 7.16% 32.22% 9.08% 17.70% 41.00% 59.00% 100%
Oct-19 34.14% 7.24% 32.02% 9.01% 17.59% 41.38% 58.62% 100%
Jan-20 34.46% 7.29% 31.83% 8.94% 17.48% 41.75% 58.25% 100%
Apr-20 34.78% 7.35% 31.64% 8.87% 17.36% 42.13% 57.87% 100%
Jul-20 35.11% 7.39% 31.45% 8.80% 17.25% 42.50% 57.50% 100%
Oct-20 35.45% 7.43% 31.25% 8.73% 17.14% 42.88% 57.12% 100%
Jan-21 35.80% 7.45% 31.06% 8.66% 17.03% 43.25% 56.75% 100%
Apr-21 36.20% 7.43% 30.87% 8.59% 16.91% 43.63% 56.37% 100%
Jul-21 36.60% 7.40% 30.67% 8.52% 16.80% 44.00% 55.99% 100%
Oct-21 37.00% 7.38% 30.48% 8.45% 16.69% 44.38% 55.62% 100%
Jan-22 37.40% 7.35% 30.29% 8.38% 16.58% 44.75% 55.25% 100%
Apr-22 37.80% 7.33% 30.10% 8.31% 16.46% 45.13% 54.87% 100%
Jul-22 38.20% 7.30% 29.91% 8.24% 16.35% 45.50% 54.50% 100%
Oct-22 38.60% 7.28% 29.71% 8.17% 16.24% 45.88% 54.12% 100%
Jan-23 39.00% 7.25% 29.52% 8.10% 16.13% 46.25% 53.75% 100%
Apr-23 39.40% 7.23% 29.33% 8.03% 16.01% 46.63% 53.37% 100%
Jul-23 39.80% 7.20% 29.14% 7.96% 15.90% 47.00% 53.00% 100%
Oct-23 40.20% 7.18% 28.94% 7.89% 15.79% 47.38% 52.62% 100%
Jan-24 40.60% 7.15% 28.75% 7.82% 15.68% 47.75% 52.25% 100%
Apr-24 41.00% 7.13% 28.56% 7.75% 15.56% 48.13% 51.87% 100%
Jul-24 41.40% 7.10% 28.37% 7.68% 15.45% 48.50% 51.50% 100%
Oct-24 41.80% 7.08% 28.17% 7.61% 15.34% 48.88% 51.12% 100%
Jan-25 42.20% 7.05% 27.98% 7.54% 15.23% 49.25% 50.75% 100%
Apr-25 42.60% 7.03% 27.79% 7.47% 15.11% 49.63% 50.37% 100%
Jul-25 43.00% 7.00% 27.60% 7.40% 15.00% 50.00% 50.00% 100%
Oct-25 44.55% 6.95% 26.78% 7.17% 14.55% 51.50% 48.50% 100%
Jan-26 46.10% 6.90% 25.96% 6.94% 14.10% 53.00% 47.00% 100%
Apr-26 47.65% 6.85% 25.14% 6.71% 13.65% 54.50% 45.50% 100%
Jul-26 49.20% 6.80% 24.32% 6.48% 13.20% 56.00% 44.00% 100%
Oct-26 50.75% 6.75% 23.50% 6.25% 12.75% 57.50% 42.50% 100%
Jan-27 52.30% 6.70% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-27 53.85% 6.65% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-27 55.40% 6.60% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-27 56.95% 6.55% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-28 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-28 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-28 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-28 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-29 64.70% 6.30% 16.12% 4.18% 8.70% 71.00% 29.00% 100%
Apr-29 66.25% 6.25% 15.30% 3.95% 8.25% 72.50% 27.50% 100%
Jul-29 67.80% 6.20% 14.48% 3.72% 7.80% 74.00% 26.00% 100%
Oct-29 69.35% 6.15% 13.66% 3.49% 7.35% 75.50% 24.50% 100%
Jan-30 70.90% 6.10% 12.84% 3.26% 6.90% 77.00% 23.00% 100%
Apr-30 72.45% 6.05% 12.02% 3.03% 6.45% 78.50% 21.50% 100%
Jul-30 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Oct-30 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Jan-31 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%


new L2020
Qtr G F C S I "Bonds" Stocks Total
Jan-17 52.94% 6.06% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-17 54.30% 6.20% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-17 55.68% 6.32% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-17 57.08% 6.42% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-18 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-18 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-18 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-18 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-19 64.44% 6.27% 15.12% 3.92% 10.25% 70.71% 29.29% 100%
Apr-19 65.73% 6.20% 14.50% 3.74% 9.83% 71.93% 28.07% 100%
Jul-19 67.01% 6.13% 13.89% 3.57% 9.40% 73.14% 26.86% 100%
Oct-19 68.30% 6.06% 13.27% 3.39% 8.98% 74.36% 25.64% 100%
Jan-20 69.58% 5.99% 12.66% 3.22% 8.55% 75.57% 24.43% 100%
Apr-20 70.87% 5.92% 12.04% 3.04% 8.13% 76.79% 23.21% 100%
Jul-20 72.15% 5.85% 11.44% 2.86% 7.70% 78.00% 22.00% 100%
Oct-20 71.92% 5.83% 11.57% 2.89% 7.79% 77.75% 22.25% 100%
Jan-21 71.69% 5.81% 11.69% 2.93% 7.88% 77.50% 22.50% 100%
Apr-21 71.46% 5.79% 11.83% 2.96% 7.96% 77.25% 22.75% 100%
Jul-21 71.23% 5.78% 11.95% 2.99% 8.05% 77.01% 22.99% 100%
Oct-21 70.99% 5.76% 12.09% 3.02% 8.14% 76.75% 23.25% 100%
Jan-22 70.76% 5.74% 12.21% 3.06% 8.23% 76.50% 23.50% 100%
Apr-22 70.53% 5.72% 12.35% 3.09% 8.31% 76.25% 23.75% 100%
Jul-22 70.30% 5.70% 12.48% 3.12% 8.40% 76.00% 24.00% 100%
Oct-22 70.07% 5.68% 12.61% 3.15% 8.49% 75.75% 24.25% 100%
Jan-23 69.84% 5.66% 12.73% 3.19% 8.58% 75.50% 24.50% 100%
Apr-23 69.61% 5.64% 12.87% 3.22% 8.66% 75.25% 24.75% 100%
Jul-23 69.38% 5.63% 12.99% 3.25% 8.75% 75.01% 24.99% 100%
Oct-23 69.14% 5.61% 13.13% 3.28% 8.84% 74.75% 25.25% 100%
Jan-24 68.91% 5.59% 13.25% 3.32% 8.93% 74.50% 25.50% 100%
Apr-24 68.68% 5.57% 13.39% 3.35% 9.01% 74.25% 25.75% 100%
Jul-24 68.45% 5.55% 13.52% 3.38% 9.10% 74.00% 26.00% 100%
Oct-24 68.22% 5.53% 13.65% 3.41% 9.19% 73.75% 26.25% 100%
Jan-25 67.99% 5.51% 13.77% 3.45% 9.28% 73.50% 26.50% 100%
Apr-25 67.76% 5.49% 13.91% 3.48% 9.36% 73.25% 26.75% 100%
Jul-25 67.53% 5.48% 14.03% 3.51% 9.45% 73.01% 26.99% 100%
Oct-25 67.29% 5.46% 14.17% 3.54% 9.54% 72.75% 27.25% 100%
Jan-26 67.06% 5.44% 14.29% 3.58% 9.63% 72.50% 27.50% 100%
Apr-26 66.83% 5.42% 14.43% 3.61% 9.71% 72.25% 27.75% 100%
Jul-26 66.60% 5.40% 14.56% 3.64% 9.80% 72.00% 28.00% 100%
Oct-26 66.37% 5.38% 14.69% 3.67% 9.89% 71.75% 28.25% 100%
Jan-27 66.14% 5.36% 14.81% 3.71% 9.98% 71.50% 28.50% 100%
Apr-27 65.91% 5.34% 14.95% 3.74% 10.06% 71.25% 28.75% 100%
Jul-27 65.68% 5.33% 15.07% 3.77% 10.15% 71.01% 28.99% 100%
Oct-27 65.44% 5.31% 15.21% 3.80% 10.24% 70.75% 29.25% 100%
Jan-28 65.21% 5.29% 15.33% 3.84% 10.33% 70.50% 29.50% 100%
Apr-28 64.98% 5.27% 15.47% 3.87% 10.41% 70.25% 29.75% 100%
Jul-28 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%
Oct-28 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%
Jan-29 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%


new L2030
Qtr G F C S I "Bonds" Stocks Total
Jan-17 31.21% 6.04% 34.14% 9.78% 18.83% 37.25% 62.75% 100.00%
Apr-17 31.44% 6.19% 33.95% 9.71% 18.71% 37.63% 62.37% 100.00%
Jul-17 31.67% 6.33% 33.76% 9.64% 18.60% 38.00% 62.00% 100.00%
Oct-17 31.91% 6.47% 33.56% 9.57% 18.49% 38.38% 61.62% 100.00%
Jan-18 32.16% 6.59% 33.37% 9.50% 18.38% 38.75% 61.25% 100.00%
Apr-18 32.42% 6.71% 33.18% 9.43% 18.26% 39.13% 60.87% 100.00%
Jul-18 32.69% 6.81% 32.99% 9.36% 18.15% 39.50% 60.50% 100.00%
Oct-18 32.96% 6.92% 32.79% 9.29% 18.04% 39.88% 60.12% 100.00%
Jan-19 32.94% 6.94% 30.46% 8.62% 21.04% 39.88% 60.12% 100.00%
Apr-19 32.92% 6.96% 30.48% 8.60% 21.04% 39.88% 60.12% 100.00%
Jul-19 32.92% 6.96% 30.49% 8.59% 21.04% 39.88% 60.12% 100.00%
Oct-19 32.90% 6.98% 30.50% 8.58% 21.04% 39.88% 60.12% 100.00%
Jan-20 32.92% 6.96% 30.51% 8.57% 21.04% 39.88% 60.12% 100.00%
Apr-20 32.92% 6.96% 30.52% 8.56% 21.04% 39.88% 60.12% 100.00%
Jul-20 32.95% 6.93% 30.54% 8.54% 21.04% 39.88% 60.12% 100.00%
Oct-20 32.97% 6.91% 30.55% 8.53% 21.04% 39.88% 60.12% 100.00%
Jan-21 33.01% 6.87% 30.56% 8.52% 21.04% 39.88% 60.12% 100.00%
Apr-21 33.09% 6.79% 30.57% 8.51% 21.04% 39.88% 60.12% 100.00%
Jul-21 33.17% 6.71% 30.59% 8.49% 21.04% 39.88% 60.12% 100.00%
Oct-21 33.25% 6.63% 30.60% 8.48% 21.04% 39.88% 60.12% 100.00%
Jan-22 33.33% 6.55% 30.61% 8.47% 21.04% 39.88% 60.12% 100.00%
Apr-22 33.40% 6.48% 30.63% 8.45% 21.04% 39.88% 60.12% 100.00%
Jul-22 33.48% 6.40% 30.64% 8.44% 21.04% 39.88% 60.12% 100.00%
Oct-22 33.55% 6.33% 30.65% 8.43% 21.04% 39.88% 60.12% 100.00%
Jan-23 33.63% 6.25% 30.67% 8.41% 21.04% 39.88% 60.12% 100.00%
Apr-23 33.70% 6.18% 30.68% 8.40% 21.04% 39.88% 60.12% 100.00%
Jul-23 33.77% 6.11% 30.70% 8.38% 21.04% 39.88% 60.12% 100.00%
Oct-23 33.84% 6.04% 30.71% 8.37% 21.04% 39.88% 60.12% 100.00%
Jan-24 33.91% 5.97% 30.72% 8.36% 21.04% 39.88% 60.12% 100.00%
Apr-24 33.97% 5.91% 30.74% 8.34% 21.04% 39.88% 60.12% 100.00%
Jul-24 34.04% 5.84% 30.75% 8.33% 21.04% 39.88% 60.12% 100.00%
Oct-24 34.10% 5.78% 30.77% 8.31% 21.04% 39.88% 60.12% 100.00%
Jan-25 34.17% 5.71% 30.78% 8.30% 21.04% 39.88% 60.12% 100.00%
Apr-25 34.23% 5.65% 30.80% 8.28% 21.04% 39.88% 60.12% 100.00%
Jul-25 34.40% 5.60% 30.75% 8.25% 21.00% 40.00% 60.00% 100.00%
Oct-25 35.90% 5.60% 29.99% 8.03% 20.48% 41.50% 58.50% 100.00%
Jan-26 37.40% 5.60% 29.23% 7.82% 19.95% 43.00% 57.00% 100.00%
Apr-26 38.91% 5.59% 28.47% 7.60% 19.43% 44.50% 55.50% 100.00%
Jul-26 40.41% 5.59% 27.72% 7.38% 18.90% 46.00% 54.00% 100.00%
Oct-26 41.92% 5.58% 26.95% 7.17% 18.38% 47.50% 52.50% 100.00%
Jan-27 43.44% 5.56% 26.20% 6.95% 17.85% 49.00% 51.00% 100.00%
Apr-27 44.95% 5.55% 25.43% 6.74% 17.33% 50.50% 49.50% 100.00%
Jul-27 46.46% 5.54% 24.68% 6.52% 16.80% 52.00% 48.00% 100.00%
Oct-27 47.98% 5.52% 23.91% 6.31% 16.28% 53.50% 46.50% 100.00%
Jan-28 49.50% 5.50% 23.16% 6.09% 15.75% 55.00% 45.00% 100.00%
Apr-28 51.02% 5.48% 22.40% 5.87% 15.23% 56.50% 43.50% 100.00%
Jul-28 52.54% 5.46% 21.64% 5.66% 14.70% 58.00% 42.00% 100.00%
Oct-28 54.06% 5.44% 20.88% 5.44% 14.18% 59.50% 40.50% 100.00%
Jan-29 55.59% 5.41% 20.13% 5.22% 13.65% 61.00% 39.00% 100.00%
Apr-29 57.11% 5.39% 19.37% 5.00% 13.13% 62.50% 37.50% 100.00%
Jul-29 58.64% 5.36% 18.62% 4.78% 12.60% 64.00% 36.00% 100.00%
Oct-29 60.16% 5.34% 17.86% 4.56% 12.08% 65.50% 34.50% 100.00%
Jan-30 61.69% 5.31% 17.11% 4.34% 11.55% 67.00% 33.00% 100.00%
Apr-30 63.22% 5.28% 16.35% 4.12% 11.03% 68.50% 31.50% 100.00%
Jul-30 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%
Oct-30 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%
Jan-31 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%

deskjockey
Posts: 167
Joined: Sat Dec 03, 2016 11:15 am

Re: TSP Lifecycle funds getting less conservative

Post by deskjockey » Fri Nov 30, 2018 5:00 pm

This is one of the reasons I'm not a fan of the L Funds (or lifecycle funds in general). It's not the first time they've changed the allocations/glide path, and I have a feeling it won't be the last. Vanguard has done the same thing, as have other companies. I used to have a lifecycle fund for our 529 accounts, but the same thing happened and they added a bunch of slice and dice funds, raising the overall fees and monkeying with the glide path. I'm wondering what made the Board decide to do this now?

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Gelsomina
Posts: 9
Joined: Fri Feb 24, 2017 6:51 pm
Location: Unbearable SoCal

Re: TSP Lifecycle funds getting less conservative

Post by Gelsomina » Fri Nov 30, 2018 5:44 pm

That's part of the problem with the TSP Board, we don't get much in way of details out of them. You can hunt down info on their Board's website at https://www.frtib.gov , but even after reading all of the board meeting minutes all I could find was mention November 2017 of the proposal to move the I Fund from the MSCI EAFE to tracking MSCI ACWI Ex-US IMI. The next mention of I Fund in regards to it's changes was in March 2018 when they barely mentioned re-competing the contract for it.

Has anyone else found any DOCUMENTS (not speculative new articles or opinions) about the details/plan to move the I Fund?

Quite frankly, I think this is Black Rock's doing, but I have nothing to base this opinion on other than my gut.

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Gelsomina
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Location: Unbearable SoCal

Re: TSP Lifecycle funds getting less conservative

Post by Gelsomina » Fri Nov 30, 2018 5:56 pm

Deskjockey,
I totally understand your point of view. But I still do like Lifecycle Funds because they keep me from messing around unless they make changes. I just check for changes in the glide paths every quarter (hence my spreadsheets with allocation percentages). I can easily tweek my own combination of Lifecycle Funds if they make small changes to the L Funds. Except for now... they obliterated the glide paths for several years.

The lack of detailed insight into the TSP Board's plans is weird to me; they manage well over half a trillion dollars. I would think that they could provide more details.

gtwhitegold
Posts: 266
Joined: Fri Sep 21, 2012 1:55 pm

Re: TSP Lifecycle funds getting less conservative

Post by gtwhitegold » Fri Nov 30, 2018 6:25 pm

In your situation, I would probably just manage my own allocation and rebalance periodically. Just don't look at your portfolio more often than you need to in order to minimize the likelihood of doing something that isn't in your best interest.
Gelsomina wrote:
Fri Nov 30, 2018 4:50 pm
I've been tracking the details on the L Fund allocations/glide paths for a long time and prior to the announcement of the glide path changes. It was tedious but I collected the quarterly allocations in the L2030, L2020, and L Income into a spreadsheet because I wasn't happy with the L2020 glide path; it was too conservative for me retiring in 2022 based on what I like to see in my Vanguard IRA glide path. My aim was for a 70/30 mix at retirement.

The L Income was set with allocations of "bonds" (for lack of better word) 80% and stocks 20%. The L2020 and L2030 were comparatively about 10% more conservative that I wanted as well. So my solution was a combined L2020/L2030 blend to achieve a glide path with a resultant 70/30 mix for my personal retirement timeframe thrown in (April 2022).

I thought that the changes to the Lifecycle Funds would be good, but it's actually destroyed the traditional concept of glide paths because they're implementing them over a long period of time. This morning I collected the new quarterly allocation percentages for the L2030, L2020, and L Income for January 2019 and beyond.

And now I understand why they did NOT mention the L2020 in any of those information releases. It's not a gradually down-sloping path, it's a weird mogul path. It's still too conservative maintaining the old glide path from January 2019 to July 2020, then starts increasing risk October 2020 to April 2028. It stays too "low risk" early on then increases risk too late (increases risk the in retirement).

The L Income has slowly increasing risk. I sense that maybe there's some issue that makes easing into higher risk make sense when you're no longer putting new money into the TSP, and not in the workforce?

I'm still in the workforce, have the option of staying there past my target of April 2022, and still putting new money into the TSP. It doesn't really make sense for me to put my money in the new L2020 with that weird mogul glide path, or a combination L2020/L2030, or the L2030.

I guess that means I need to go back to creating my own "lifecycle" by directly investing in the G,F,C,S,I. It is a huge pain in the butt because I cannot fine tune allocations (TSP only allow whole percentages), and then I have to be messing around with it at least quarterly if not monthly or every paycheck in order to maintain my glide path. That feels like timing the market or at least gives me the anxiety of market timing. And I worry looking at it or touching allocations that often will be a huge temptation to start playing games instead of sticking to my plan.

Also, I find it extremely irritating that they elected to boost all I Fund allocations in the Lifecycles in January 2019 without providing information on whether or not the proposed changes to the I Fund are in place or not. Are we just supposed to assume the changes will be in place because they increased the allocations by 5% across all Lifecycle Funds? [I Fund will supposedly stop tracking the Morgan Stanley Capital International Europe, Australasia and Far East Index (MSCI EAFE) in 2019 and will begin tracking the Morgan Stanley Capital International All Country World Ex-US Investable Market Index (MSCI ACWI Ex-US IMI)]. I don't want to boost my I Fund allocation when it might still just be the MSCI EAFE.

QUESTIONS:
Did the TSP Board think it would be too much of a shock to everyone and the system to just warn everyone in advance that they were going to go to corrected allocations all at once in January 2019? Is there some kind of good reason to slowly ramp up? If there is a good reason, the TSP Board is not sharing it with us.

Anyway, here are the old L2020 and L2030 glide paths, and the new ones:

old L2020 glide slope prior to Jan 2019
Qtr G F C S I "Bonds" Stocks Total
Jan-17 52.94% 6.06% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-17 54.30% 6.20% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-17 55.68% 6.32% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-17 57.08% 6.42% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-18 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-18 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-18 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-18 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-19 64.70% 6.30% 16.12% 4.18% 8.70% 71.00% 29.00% 100%
Apr-19 66.25% 6.25% 15.30% 3.95% 8.25% 72.50% 27.50% 100%
Jul-19 67.80% 6.20% 14.48% 3.72% 7.80% 74.00% 26.00% 100%
Oct-19 69.35% 6.15% 13.66% 3.49% 7.35% 75.50% 24.50% 100%
Jan-20 70.90% 6.10% 12.84% 3.26% 6.90% 77.00% 23.00% 100%
Apr-20 72.45% 6.05% 12.02% 3.03% 6.45% 78.50% 21.50% 100%
Jul-20 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Oct-20 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Jan-21 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%

old L2030 glide slope prior to Jan 2019
Qtr G F C S I "Bonds" Stocks Total
Jan-17 31.21% 6.04% 34.14% 9.78% 18.83% 37.25% 62.75% 100%
Apr-17 31.44% 6.19% 33.95% 9.71% 18.71% 37.63% 62.37% 100%
Jul-17 31.67% 6.33% 33.76% 9.64% 18.60% 38.00% 62.00% 100%
Oct-17 31.91% 6.47% 33.56% 9.57% 18.49% 38.38% 61.62% 100%
Jan-18 32.16% 6.59% 33.37% 9.50% 18.38% 38.75% 61.25% 100%
Apr-18 32.42% 6.71% 33.18% 9.43% 18.26% 39.13% 60.87% 100%
Jul-18 32.69% 6.81% 32.99% 9.36% 18.15% 39.50% 60.50% 100%
Oct-18 32.96% 6.92% 32.79% 9.29% 18.04% 39.88% 60.12% 100%
Jan-19 33.25% 7.00% 32.60% 9.22% 17.93% 40.25% 59.75% 100%
Apr-19 33.54% 7.09% 32.41% 9.15% 17.81% 40.63% 59.37% 100%
Jul-19 33.84% 7.16% 32.22% 9.08% 17.70% 41.00% 59.00% 100%
Oct-19 34.14% 7.24% 32.02% 9.01% 17.59% 41.38% 58.62% 100%
Jan-20 34.46% 7.29% 31.83% 8.94% 17.48% 41.75% 58.25% 100%
Apr-20 34.78% 7.35% 31.64% 8.87% 17.36% 42.13% 57.87% 100%
Jul-20 35.11% 7.39% 31.45% 8.80% 17.25% 42.50% 57.50% 100%
Oct-20 35.45% 7.43% 31.25% 8.73% 17.14% 42.88% 57.12% 100%
Jan-21 35.80% 7.45% 31.06% 8.66% 17.03% 43.25% 56.75% 100%
Apr-21 36.20% 7.43% 30.87% 8.59% 16.91% 43.63% 56.37% 100%
Jul-21 36.60% 7.40% 30.67% 8.52% 16.80% 44.00% 55.99% 100%
Oct-21 37.00% 7.38% 30.48% 8.45% 16.69% 44.38% 55.62% 100%
Jan-22 37.40% 7.35% 30.29% 8.38% 16.58% 44.75% 55.25% 100%
Apr-22 37.80% 7.33% 30.10% 8.31% 16.46% 45.13% 54.87% 100%
Jul-22 38.20% 7.30% 29.91% 8.24% 16.35% 45.50% 54.50% 100%
Oct-22 38.60% 7.28% 29.71% 8.17% 16.24% 45.88% 54.12% 100%
Jan-23 39.00% 7.25% 29.52% 8.10% 16.13% 46.25% 53.75% 100%
Apr-23 39.40% 7.23% 29.33% 8.03% 16.01% 46.63% 53.37% 100%
Jul-23 39.80% 7.20% 29.14% 7.96% 15.90% 47.00% 53.00% 100%
Oct-23 40.20% 7.18% 28.94% 7.89% 15.79% 47.38% 52.62% 100%
Jan-24 40.60% 7.15% 28.75% 7.82% 15.68% 47.75% 52.25% 100%
Apr-24 41.00% 7.13% 28.56% 7.75% 15.56% 48.13% 51.87% 100%
Jul-24 41.40% 7.10% 28.37% 7.68% 15.45% 48.50% 51.50% 100%
Oct-24 41.80% 7.08% 28.17% 7.61% 15.34% 48.88% 51.12% 100%
Jan-25 42.20% 7.05% 27.98% 7.54% 15.23% 49.25% 50.75% 100%
Apr-25 42.60% 7.03% 27.79% 7.47% 15.11% 49.63% 50.37% 100%
Jul-25 43.00% 7.00% 27.60% 7.40% 15.00% 50.00% 50.00% 100%
Oct-25 44.55% 6.95% 26.78% 7.17% 14.55% 51.50% 48.50% 100%
Jan-26 46.10% 6.90% 25.96% 6.94% 14.10% 53.00% 47.00% 100%
Apr-26 47.65% 6.85% 25.14% 6.71% 13.65% 54.50% 45.50% 100%
Jul-26 49.20% 6.80% 24.32% 6.48% 13.20% 56.00% 44.00% 100%
Oct-26 50.75% 6.75% 23.50% 6.25% 12.75% 57.50% 42.50% 100%
Jan-27 52.30% 6.70% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-27 53.85% 6.65% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-27 55.40% 6.60% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-27 56.95% 6.55% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-28 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-28 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-28 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-28 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-29 64.70% 6.30% 16.12% 4.18% 8.70% 71.00% 29.00% 100%
Apr-29 66.25% 6.25% 15.30% 3.95% 8.25% 72.50% 27.50% 100%
Jul-29 67.80% 6.20% 14.48% 3.72% 7.80% 74.00% 26.00% 100%
Oct-29 69.35% 6.15% 13.66% 3.49% 7.35% 75.50% 24.50% 100%
Jan-30 70.90% 6.10% 12.84% 3.26% 6.90% 77.00% 23.00% 100%
Apr-30 72.45% 6.05% 12.02% 3.03% 6.45% 78.50% 21.50% 100%
Jul-30 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Oct-30 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%
Jan-31 74.00% 6.00% 11.20% 2.80% 6.00% 80.00% 20.00% 100%


new L2020
Qtr G F C S I "Bonds" Stocks Total
Jan-17 52.94% 6.06% 22.68% 6.02% 12.30% 59.00% 41.00% 100%
Apr-17 54.30% 6.20% 21.86% 5.79% 11.85% 60.50% 39.50% 100%
Jul-17 55.68% 6.32% 21.04% 5.56% 11.40% 62.00% 38.00% 100%
Oct-17 57.08% 6.42% 20.22% 5.33% 10.95% 63.50% 36.50% 100%
Jan-18 58.50% 6.50% 19.40% 5.10% 10.50% 65.00% 35.00% 100%
Apr-18 60.05% 6.45% 18.58% 4.87% 10.05% 66.50% 33.50% 100%
Jul-18 61.60% 6.40% 17.76% 4.64% 9.60% 68.00% 32.00% 100%
Oct-18 63.15% 6.35% 16.94% 4.41% 9.15% 69.50% 30.50% 100%
Jan-19 64.44% 6.27% 15.12% 3.92% 10.25% 70.71% 29.29% 100%
Apr-19 65.73% 6.20% 14.50% 3.74% 9.83% 71.93% 28.07% 100%
Jul-19 67.01% 6.13% 13.89% 3.57% 9.40% 73.14% 26.86% 100%
Oct-19 68.30% 6.06% 13.27% 3.39% 8.98% 74.36% 25.64% 100%
Jan-20 69.58% 5.99% 12.66% 3.22% 8.55% 75.57% 24.43% 100%
Apr-20 70.87% 5.92% 12.04% 3.04% 8.13% 76.79% 23.21% 100%
Jul-20 72.15% 5.85% 11.44% 2.86% 7.70% 78.00% 22.00% 100%
Oct-20 71.92% 5.83% 11.57% 2.89% 7.79% 77.75% 22.25% 100%
Jan-21 71.69% 5.81% 11.69% 2.93% 7.88% 77.50% 22.50% 100%
Apr-21 71.46% 5.79% 11.83% 2.96% 7.96% 77.25% 22.75% 100%
Jul-21 71.23% 5.78% 11.95% 2.99% 8.05% 77.01% 22.99% 100%
Oct-21 70.99% 5.76% 12.09% 3.02% 8.14% 76.75% 23.25% 100%
Jan-22 70.76% 5.74% 12.21% 3.06% 8.23% 76.50% 23.50% 100%
Apr-22 70.53% 5.72% 12.35% 3.09% 8.31% 76.25% 23.75% 100%
Jul-22 70.30% 5.70% 12.48% 3.12% 8.40% 76.00% 24.00% 100%
Oct-22 70.07% 5.68% 12.61% 3.15% 8.49% 75.75% 24.25% 100%
Jan-23 69.84% 5.66% 12.73% 3.19% 8.58% 75.50% 24.50% 100%
Apr-23 69.61% 5.64% 12.87% 3.22% 8.66% 75.25% 24.75% 100%
Jul-23 69.38% 5.63% 12.99% 3.25% 8.75% 75.01% 24.99% 100%
Oct-23 69.14% 5.61% 13.13% 3.28% 8.84% 74.75% 25.25% 100%
Jan-24 68.91% 5.59% 13.25% 3.32% 8.93% 74.50% 25.50% 100%
Apr-24 68.68% 5.57% 13.39% 3.35% 9.01% 74.25% 25.75% 100%
Jul-24 68.45% 5.55% 13.52% 3.38% 9.10% 74.00% 26.00% 100%
Oct-24 68.22% 5.53% 13.65% 3.41% 9.19% 73.75% 26.25% 100%
Jan-25 67.99% 5.51% 13.77% 3.45% 9.28% 73.50% 26.50% 100%
Apr-25 67.76% 5.49% 13.91% 3.48% 9.36% 73.25% 26.75% 100%
Jul-25 67.53% 5.48% 14.03% 3.51% 9.45% 73.01% 26.99% 100%
Oct-25 67.29% 5.46% 14.17% 3.54% 9.54% 72.75% 27.25% 100%
Jan-26 67.06% 5.44% 14.29% 3.58% 9.63% 72.50% 27.50% 100%
Apr-26 66.83% 5.42% 14.43% 3.61% 9.71% 72.25% 27.75% 100%
Jul-26 66.60% 5.40% 14.56% 3.64% 9.80% 72.00% 28.00% 100%
Oct-26 66.37% 5.38% 14.69% 3.67% 9.89% 71.75% 28.25% 100%
Jan-27 66.14% 5.36% 14.81% 3.71% 9.98% 71.50% 28.50% 100%
Apr-27 65.91% 5.34% 14.95% 3.74% 10.06% 71.25% 28.75% 100%
Jul-27 65.68% 5.33% 15.07% 3.77% 10.15% 71.01% 28.99% 100%
Oct-27 65.44% 5.31% 15.21% 3.80% 10.24% 70.75% 29.25% 100%
Jan-28 65.21% 5.29% 15.33% 3.84% 10.33% 70.50% 29.50% 100%
Apr-28 64.98% 5.27% 15.47% 3.87% 10.41% 70.25% 29.75% 100%
Jul-28 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%
Oct-28 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%
Jan-29 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100%


new L2030
Qtr G F C S I "Bonds" Stocks Total
Jan-17 31.21% 6.04% 34.14% 9.78% 18.83% 37.25% 62.75% 100.00%
Apr-17 31.44% 6.19% 33.95% 9.71% 18.71% 37.63% 62.37% 100.00%
Jul-17 31.67% 6.33% 33.76% 9.64% 18.60% 38.00% 62.00% 100.00%
Oct-17 31.91% 6.47% 33.56% 9.57% 18.49% 38.38% 61.62% 100.00%
Jan-18 32.16% 6.59% 33.37% 9.50% 18.38% 38.75% 61.25% 100.00%
Apr-18 32.42% 6.71% 33.18% 9.43% 18.26% 39.13% 60.87% 100.00%
Jul-18 32.69% 6.81% 32.99% 9.36% 18.15% 39.50% 60.50% 100.00%
Oct-18 32.96% 6.92% 32.79% 9.29% 18.04% 39.88% 60.12% 100.00%
Jan-19 32.94% 6.94% 30.46% 8.62% 21.04% 39.88% 60.12% 100.00%
Apr-19 32.92% 6.96% 30.48% 8.60% 21.04% 39.88% 60.12% 100.00%
Jul-19 32.92% 6.96% 30.49% 8.59% 21.04% 39.88% 60.12% 100.00%
Oct-19 32.90% 6.98% 30.50% 8.58% 21.04% 39.88% 60.12% 100.00%
Jan-20 32.92% 6.96% 30.51% 8.57% 21.04% 39.88% 60.12% 100.00%
Apr-20 32.92% 6.96% 30.52% 8.56% 21.04% 39.88% 60.12% 100.00%
Jul-20 32.95% 6.93% 30.54% 8.54% 21.04% 39.88% 60.12% 100.00%
Oct-20 32.97% 6.91% 30.55% 8.53% 21.04% 39.88% 60.12% 100.00%
Jan-21 33.01% 6.87% 30.56% 8.52% 21.04% 39.88% 60.12% 100.00%
Apr-21 33.09% 6.79% 30.57% 8.51% 21.04% 39.88% 60.12% 100.00%
Jul-21 33.17% 6.71% 30.59% 8.49% 21.04% 39.88% 60.12% 100.00%
Oct-21 33.25% 6.63% 30.60% 8.48% 21.04% 39.88% 60.12% 100.00%
Jan-22 33.33% 6.55% 30.61% 8.47% 21.04% 39.88% 60.12% 100.00%
Apr-22 33.40% 6.48% 30.63% 8.45% 21.04% 39.88% 60.12% 100.00%
Jul-22 33.48% 6.40% 30.64% 8.44% 21.04% 39.88% 60.12% 100.00%
Oct-22 33.55% 6.33% 30.65% 8.43% 21.04% 39.88% 60.12% 100.00%
Jan-23 33.63% 6.25% 30.67% 8.41% 21.04% 39.88% 60.12% 100.00%
Apr-23 33.70% 6.18% 30.68% 8.40% 21.04% 39.88% 60.12% 100.00%
Jul-23 33.77% 6.11% 30.70% 8.38% 21.04% 39.88% 60.12% 100.00%
Oct-23 33.84% 6.04% 30.71% 8.37% 21.04% 39.88% 60.12% 100.00%
Jan-24 33.91% 5.97% 30.72% 8.36% 21.04% 39.88% 60.12% 100.00%
Apr-24 33.97% 5.91% 30.74% 8.34% 21.04% 39.88% 60.12% 100.00%
Jul-24 34.04% 5.84% 30.75% 8.33% 21.04% 39.88% 60.12% 100.00%
Oct-24 34.10% 5.78% 30.77% 8.31% 21.04% 39.88% 60.12% 100.00%
Jan-25 34.17% 5.71% 30.78% 8.30% 21.04% 39.88% 60.12% 100.00%
Apr-25 34.23% 5.65% 30.80% 8.28% 21.04% 39.88% 60.12% 100.00%
Jul-25 34.40% 5.60% 30.75% 8.25% 21.00% 40.00% 60.00% 100.00%
Oct-25 35.90% 5.60% 29.99% 8.03% 20.48% 41.50% 58.50% 100.00%
Jan-26 37.40% 5.60% 29.23% 7.82% 19.95% 43.00% 57.00% 100.00%
Apr-26 38.91% 5.59% 28.47% 7.60% 19.43% 44.50% 55.50% 100.00%
Jul-26 40.41% 5.59% 27.72% 7.38% 18.90% 46.00% 54.00% 100.00%
Oct-26 41.92% 5.58% 26.95% 7.17% 18.38% 47.50% 52.50% 100.00%
Jan-27 43.44% 5.56% 26.20% 6.95% 17.85% 49.00% 51.00% 100.00%
Apr-27 44.95% 5.55% 25.43% 6.74% 17.33% 50.50% 49.50% 100.00%
Jul-27 46.46% 5.54% 24.68% 6.52% 16.80% 52.00% 48.00% 100.00%
Oct-27 47.98% 5.52% 23.91% 6.31% 16.28% 53.50% 46.50% 100.00%
Jan-28 49.50% 5.50% 23.16% 6.09% 15.75% 55.00% 45.00% 100.00%
Apr-28 51.02% 5.48% 22.40% 5.87% 15.23% 56.50% 43.50% 100.00%
Jul-28 52.54% 5.46% 21.64% 5.66% 14.70% 58.00% 42.00% 100.00%
Oct-28 54.06% 5.44% 20.88% 5.44% 14.18% 59.50% 40.50% 100.00%
Jan-29 55.59% 5.41% 20.13% 5.22% 13.65% 61.00% 39.00% 100.00%
Apr-29 57.11% 5.39% 19.37% 5.00% 13.13% 62.50% 37.50% 100.00%
Jul-29 58.64% 5.36% 18.62% 4.78% 12.60% 64.00% 36.00% 100.00%
Oct-29 60.16% 5.34% 17.86% 4.56% 12.08% 65.50% 34.50% 100.00%
Jan-30 61.69% 5.31% 17.11% 4.34% 11.55% 67.00% 33.00% 100.00%
Apr-30 63.22% 5.28% 16.35% 4.12% 11.03% 68.50% 31.50% 100.00%
Jul-30 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%
Oct-30 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%
Jan-31 64.75% 5.25% 15.60% 3.90% 10.50% 70.00% 30.00% 100.00%

rkhusky
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Re: TSP Lifecycle funds getting less conservative

Post by rkhusky » Sat Dec 01, 2018 7:59 am

Gelsomina wrote:
Fri Nov 30, 2018 4:50 pm
QUESTIONS:
Did the TSP Board think it would be too much of a shock to everyone and the system to just warn everyone in advance that they were going to go to corrected allocations all at once in January 2019? Is there some kind of good reason to slowly ramp up? If there is a good reason, the TSP Board is not sharing it with us.
Since the TSP is so large, if they changed everything at once and told everyone when they were going to do it, savvy traders could take advantage of it and profit. It's called "front running". Vanguard does the same thing when they make a change - they usually do it over a year (e.g. when they added small caps to the emerging markets fund).

Plus, it may be more cost effective to do it slowly.

I note that the changes bring the TSP closer to Vanguard's Target Retirement funds, which have 40% of stock in international and have a terminal 30/70 stock/bond ratio (although Vanguard reaches this 7 years after the target date, unlike right on the date like the TSP). Plus it seems like I remember reading that TSP was going to add target date fund for every 5 years, instead of the 10 years like they have now (decided May 2017, expected implementation in 2020).
Gelsomina wrote:
Fri Nov 30, 2018 4:50 pm
I guess that means I need to go back to creating my own "lifecycle" by directly investing in the G,F,C,S,I. It is a huge pain in the butt because I cannot fine tune allocations (TSP only allow whole percentages), and then I have to be messing around with it at least quarterly if not monthly or every paycheck in order to maintain my glide path. That feels like timing the market or at least gives me the anxiety of market timing. And I worry looking at it or touching allocations that often will be a huge temptation to start playing games instead of sticking to my plan.
You might be fine-tuning your portfolio and glide path too much. A lot of people allow a 5% change in their AA before they make any changes.

Chip
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Re: TSP Lifecycle funds getting less conservative

Post by Chip » Sat Dec 01, 2018 8:20 am

rkhusky wrote:
Sat Dec 01, 2018 7:59 am
You might be fine-tuning your portfolio and glide path too much. A lot of people allow a 5% change in their AA before they make any changes.
Agreed. Paraphrasing what poster Rodc used to say here: It's trying to get three significant figure accuracy in a 1 significant figure world.

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vineviz
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Re: TSP Lifecycle funds getting less conservative

Post by vineviz » Sat Dec 01, 2018 12:37 pm

rkhusky wrote:
Sat Dec 01, 2018 7:59 am
Gelsomina wrote:
Fri Nov 30, 2018 4:50 pm
I guess that means I need to go back to creating my own "lifecycle" by directly investing in the G,F,C,S,I. It is a huge pain in the butt because I cannot fine tune allocations (TSP only allow whole percentages), and then I have to be messing around with it at least quarterly if not monthly or every paycheck in order to maintain my glide path. That feels like timing the market or at least gives me the anxiety of market timing. And I worry looking at it or touching allocations that often will be a huge temptation to start playing games instead of sticking to my plan.
You might be fine-tuning your portfolio and glide path too much. A lot of people allow a 5% change in their AA before they make any changes.
I totally agree. The difference in risk or return (if there is any) between two portfolios that have asset allocation mismatches of less than 5-10% is going to be swallowed up by the noise of normal market movement.

Even the difference between a 60/40 and 80/20 allocation isn't likely to be statistically significant over person's investment horizon.
"Far more money has been lost by investors preparing for corrections than has been lost in corrections themselves." ~~ Peter Lynch

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grabiner
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Re: TSP Lifecycle funds getting less conservative

Post by grabiner » Sun Dec 02, 2018 1:33 pm

This decision is economically right, but behaviorally wrong.

The reason it is economically right is that TSP investors can be more risk-tolerant in their portfolios. They have secure jobs, with little relationship to economic situations; the government does not lay off workers when the stock market drops. If they are career government employees, they will retire with a pension and subsidized healthcare, so a market decline will make a lower change in their standard of living than it does for most investors.

But 99% stock is not the allocation most new investors should have, because their behavioral risk tolerance does not match their economic risk tolerance. I don't recommend more than 80% stock to any investor who hasn't been through a bear market.
Wiki David Grabiner

MnD
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Re: TSP Lifecycle funds getting less conservative

Post by MnD » Mon Dec 03, 2018 10:14 am

Gelsomina wrote:
Fri Nov 30, 2018 5:44 pm
Has anyone else found any DOCUMENTS (not speculative new articles or opinions) about the details/plan to move the I Fund?
See these two presentations to the TSP board (FRTIB) from AON Hewitt. I believe in both cases the presented recommendations on 1) changing the I fund composition and 2) changing the glide paths were adopted. I'm thrilled and think both actions represent a major improvement to the TSP. I'm a TSP "pioneer" (March 1987) and the pace of TSP improvements that are being made 2017-19 is nothing short of amazing given the past history of inaction.

I wouldn't worry about getting your glide path to 2 decimal places every paycheck. Whole percentage numbers on an annual time step are fine and if you didn't do anything but stay in the most appropriate Target date fund through the transition it will not make a significant difference relative to market vagaries. I don't use the L funds as I'm 70/30 for life but given what I see many federal employees doing on their own, most feds should use them.

I have not come across a timetable on the I fund transition but I intend to initiate communications to locate that information and I'll convey it here if/when I find out. I have a lot in emerging markets and small cap international funds in other retirement accounts to "fill in" the gaps in the TSP I fund so having even a rough timetable on the transition from EAFE to MSCI all-world all-cap IMI ex-US would be helpful to unwinding these fill-in positions. Absent any timetable I might reduce my fill-in EM and SCI positions by 25% each quarter starting when the new I fund management contract is in place.

https://www.frtib.gov/pdf/minutes/MM-2017Nov-Att6a.pdf
https://federalnewsnetwork.com/wp-conte ... tation.pdf

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nedsaid
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Re: TSP Lifecycle funds getting less conservative

Post by nedsaid » Mon Dec 03, 2018 11:47 am

deskjockey wrote:
Fri Nov 30, 2018 5:00 pm
This is one of the reasons I'm not a fan of the L Funds (or lifecycle funds in general). It's not the first time they've changed the allocations/glide path, and I have a feeling it won't be the last. Vanguard has done the same thing, as have other companies. I used to have a lifecycle fund for our 529 accounts, but the same thing happened and they added a bunch of slice and dice funds, raising the overall fees and monkeying with the glide path. I'm wondering what made the Board decide to do this now?
You have put your finger on three of the drawbacks of Lifecycle or Target Date Retirement funds. The asset allocation, glide path, and choice of funds change over time. All the fund companies that I follow have done this. It seems that in a long bull market that these funds get more aggressive, we all feel more confident in bull markets, institutions are not immune from this. Still, such funds are vastly better than what most individuals could do on their own, I still recommend such funds to investors. If a 2045 fund is too aggressive, just use the 2040 or 2035 fund instead.

I own one such fund. For my own asset allocation, I look at what Vanguard, Fidelity, and T Rowe Price are doing in their 2025 funds to see if I am in the ballpark. In other words, I use these as a model portfolio. You don't have to be exact as no one knows the future.
A fool and his money are good for business.

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Gelsomina
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Re: TSP Lifecycle funds getting less conservative

Post by Gelsomina » Thu Dec 06, 2018 4:42 pm

Thanks everyone for the great feedback. Good to hear about not worrying about fine-tuning allocations below the whole percent. I'm happy I've learned enough by studying the TSP and Vanguard to be able to use a personally-developed glide path.
:) Gelsomina

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