Piss Poor Financial advise

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czygvtwkr

Guest
I find that most people that ask financial advise just want someone else to tell them what to do and not help them learn. I am usually an avid reader of Federal Times | Federal News, Government Operations, Agency Management, Pay & Benefits | federaltimes.com and they have a section called ask the experts. Then the other day I saw this piece of advise.

Q. I don’t understand what you mean by invest in the L Fund based on your life expectancy. My husband plans to retire in 2014 when he turns 62. If his life expectancy is 85 years old, does that mean he should put his money in the L2020 or L2030 Fund? He is still employed, but his Thrift Savings Plan money is in the L Income Fund.
A. Recommendation to invest in the L Fund that most closely corresponds to your life expectancy (or joint life expectancy with your dependent) assumes that you don’t have the basis for a more suitable strategy. It’s like recommending that you fly a plane straight and level because I have no idea where you are or where you’re going. It’s the safest bet, but there is no assurance that it will get you where you want to go safely. Still, it’s better than recommending that you dive or climb.
Based on the information you’ve provided, you expect your husband to live until 2037, when he is 85 years old, so my rule of thumb would lead him to the L 2040 fund.
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Now anyone that knows anything about the TSP L funds knows this is no accurate at all and he is telling this poor woman whose husband is about to retire to put their money in a fund with high risk meant for young workers that will not retire until 2040.

Morale of the story, don't blindly accept advise or ask for it. It is your money learn this stuff yourself.
 
T

tommyjo

New Member
czygvtwkr said:
I find that most people that ask financial advise just want someone else to tell them what to do and not help them learn. I am usually an avid reader of Federal Times | Federal News, Government Operations, Agency Management, Pay & Benefits | federaltimes.com and they have a section called ask the experts. Then the other day I saw this piece of advise.



Now anyone that knows anything about the TSP L funds knows this is no accurate at all and he is telling this poor woman whose husband is about to retire to put their money in a fund with high risk meant for young workers that will not retire until 2040.

Morale of the story, don't blindly accept advise or ask for it. It is your money learn this stuff yourself.
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It seems you are not paying attention to what was written.

The "expert" was offering a different way of viewing or using the L funds. Re-read the first sentence of his answer and it should be crystal clear that he was not regurgitating the objective stated in the prospectus.

He didn't do a very good job of explaining his position...but he was not saying that everyone should choose an L fund based on life expectancy as you contend.

If you followed your own advice, you would understand that there are different ways to use the same investment in order to achieve different goals.
 
C

czygvtwkr

Guest
tommyjo said:
It seems you are not paying attention to what was written.

The "expert" was offering a different way of viewing or using the L funds. Re-read the first sentence of his answer and it should be crystal clear that he was not regurgitating the objective stated in the prospectus.

He didn't do a very good job of explaining his position...but he was not saying that everyone should choose an L fund based on life expectancy as you contend.

If you followed your own advice, you would understand that there are different ways to use the same investment in order to achieve different goals.
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Oh my, apparently you know nothing of the L funds. Telling someone planning to retire next year to use a fund that is fairly aggressive but risky is stupid as is anyone who would think that is good advise. A good rule of thumb would be to steer them to the L Income fund or the L2020 fund for a little bit more aggressive investment. He doesn't even mention distributions and when you retire if you are taking distributions you have the option to purchase an annuity with your balance. It is clear that he knows nothing about the TSP and neither do you. No wonder you want the government to take care of you.

I would also like to point out there is plenty of great info on the TSP website, but like most government websites it is overly complicated and nagivation is a pain in the ass. The fact sheet for the L2040 fund says specifically
Who Should Invest
For participants who will withdraw their money beginning 2035 through 2044.

Objective
To achieve a high level of growth with a very low emphasis on preservation of assets.
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It is clear the "expert" saw the term lifecycle and assumed that number was how long someone expects to live.
 
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b23hqb

b23hqb

Well-Known Member
PREMO Member
czygvtwkr said:
Oh my, apparently you know nothing of the L funds. Telling someone planning to retire next year to use a fund that is fairly aggressive but risky is stupid as is anyone who would think that is good advise. A good rule of thumb would be to steer them to the L Income fund or the L2020 fund for a little bit more aggressive investment. He doesn't even mention distributions and when you retire if you are taking distributions you have the option to purchase an annuity with your balance. It is clear that he knows nothing about the TSP and neither do you. No wonder you want the government to take care of you.

I would also like to point out there is plenty of great info on the TSP website, but like most government websites it is overly complicated and nagivation is a pain in the ass. The fact sheet for the L2040 fund says specifically


It is clear the "expert" saw the term lifecycle and assumed that number was how long someone expects to live.
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When I was in TSP, L funds meant what it said - looking over all the funds for long term. Not a wise thing to do with one year left.

C fund is the way to go.
 
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