How to Customize L Funds When You’re Ahead (or Behind)

September 29, 2025

Every TSP investor has seen the Lifecycle (L) Funds — the “set-it-and-forget-it” portfolios that automatically grow more conservative as you near retirement.

They’re convenient. They’re smart defaults.

But here’s the problem: the L Funds are built for the average federal employee.

If you’re ahead of schedule on savings — or still catching up — the “average” glide path may not fit you.

Step 1: Know Where You Stand

Quick gut check:

  • If your TSP + projected pension + Social Security already meet your retirement income goal → you’re ahead.

  • If your projections fall short, even with catch-up contributions → you’re behind.

  • If you’re somewhere in the middle → you’re on track.

Step 2: Tune Your Glide Path

If You’re Ahead

➡ Protect what you’ve built.

  • Add an extra 5–15% to the G Fund as a near-term “safety bucket.”

  • Trim equities slightly (C/S) — keeping your stock exposure at or below the L Fund’s target.

  • Use G instead of F if interest-rate swings make you nervous.

If You’re Behind

➡ Give yourself more growth runway.

  • Use the next-later L Fund (e.g., L 2040 instead of L 2035) as your base.

  • Add a modest tilt to C/S (up to 10% total) by trimming G/F.

  • But don’t push equities above ~75–80% if you’re nearing retirement.

Step 3: Guardrails

No matter your path:

  • Keep tilts within 15% of the base L Fund.

  • Rebalance quarterly or when allocations drift by more than 5%.

  • Use the “sleep test”: if a 20–30% equity drop would derail you emotionally, you’re too aggressive.

Step 4: A Simple Implementation

  • Keep most of your account (80–90%) in your L Fund.

  • Use the remaining 10–20% for your custom tilt (extra G for safety, extra C/S for growth).

  • Match your contribution allocation to your new target mix, not just your current balance.

Bottom Line

L Funds are great starting points.

But when you’re not average — either comfortably ahead or pushing to catch up — a small tune-up can align your TSP more closely with your real-life retirement goals.

Your glide path isn’t just about the calendar year in your fund name.

It’s about where you are on the journey.

Best,
—FWR