TSP thrift savings plan
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TSP thrift savings plan


TSP 2020 L Fund

The TSP website describes the basic initial portfolio structure of their 2020 L Fund. This is considered a "moderate" portfolio mix, and TSP is currently targeted to those TSP'ers who are expecting to start drawing down their accounts on or before 2020.

The mix is more aggressively slanted to the TSP stock funds and closely matches the more typical "65/35" mix lifestyle portfolios available for investors in other 401k plans. Offering a "moderately aggressive" mix of stock and bond funds, the 2020 L Fund might appeal to those investors who are moderately optimistic about the future of the stock market and willing to accept a moderate level of market risk to reach their retirement goals.

TABLE XXI

 TSP Pilot Portfolio vs. TSP L Funds, Timed and Un-timed (1989 - 2010)*
Portfolio Annualized Return
(AR)5		 Maximum Draw-down
(Mdd)1		 Ulcer Performance Index
(UPI)2		 Ulcer Index
(UI)3		 Standard Deviation
(SD)4
TSP Income L Fund 5.4% -11.7% 0.1 1.7 1.0
Pilot Timed Income L Fund 5.7% -3.4% 0.5 0.5 0.6
TSP 2020 L Fund 7.8% -40.0% 0.3 10.0 3.2
Pilot Timed 2020 L Fund 8.2% -12.8% 1.2 2.7 1.9
TSP 2030 L Fund 8.4% -45.2% 0.3 12.0 3.7
Pilot Timed 2030 L Fund 8.9% -14.9% 1.1 3.6 2.2
TSP 2040 L Fund 8.9% -50.2% 0.3 14.0 4.2
Pilot Timed 2040 L Fund 9.4% -16.8% 1.0 4.5 2.5
TSP PILOT Standard PORTFOLIO 15.5% -8.2% 5.8 2.3 2.4
Note: Look for a low UI and Mdd and a high Return and UPI as keys to best performance.
Also see information on our Pilot Aggressive Portfolio.
* Database begins 9/1/1988. Some early periods based on proxies for L and I funds.
** Proxy for I Fund begins 1/25/96.
- The TSP L Funds were introduced in 2005. However, our performance for the L Funds begins on 12/31/88 to provide for a more useful assessment of the L Fund methodology. Fund proxies are used prior to 8/1/05. Actual performance for TSP L funds would be considerably worse than that shown if viewed from the actual L Fund inception date of 8/1/05.
- Charts, listings and data by www.FastTrack.net

The 2020 L Fund would have shown you a 7.8% annualized return over the last 22 years while steadily dropping your account value by about 40% several times during that period (Mdd)!

This slide of this "moderate" portfolio would have been tough for anyone to sit through without a knee-jerk reaction to sell out. In fact that's the essential problem with all of the L Funds except perhaps for the income fund. The performance index (UPI) of this L Fund was a rather miserable 0.3.

The TSP Pilot Portfolio, over the same period, provided nearly double the return with about half the risk exposure UI of the 2020 L Fund and one-quarter of its draw down.

Don't test the retirement waters alone. Put your TSP ship a league ahead by requesting your FREE ISSUE or by SUBSCRIBING at our special reduced rates today!

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TSP Pilot is a commercial service not associated in any way with the U.S. Federal government. TSP Pilot does not issue individual investment advice. TSP Pilot publications are prepared for informational and educational purposes only. Past stated hypothetical performance is not an indication of future performance. Charts, listings and data by www.FastTrack.net.

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