The L Funds began accepting contributions in August 2005.
In that year, they consisted of the L Income Fund, the L 2020 Fund, the L 2030 Fund, and the L 2040 Fund.
The most recent fund, the L 2050 Fund, began accepting contributions in February 2011.
The funds consist of a different mix of the TSP stock and bond funds. The L Income is the most conservative, with the least amount of stock fund holdings compared to bond fund holdings. It has almost 75% of total holdings invested in the G Fund, another 6% in the F Fund, and the remainder is invested in the C, S, and I stock funds. (The stock holdings will gradually increase in the coming years, however.)
The L 2050 Fund, in contrast, keeps a majority of investors’ contributions in stock funds. It has over 80% invested in the C, S, and I stock funds, and just under 20% invested in the G and F bond funds.
The funds’ holdings of stock funds compared to bond funds gradually decrease over the years, so that the fund holdings are more conservative - and less prone to major swings in value - as one nears retirement.
Readers can see the current allocations among the L Funds here.
The charts below represent the returns of each L fund based on monthly investments that total the maximum yearly TSP deferral limits*, from the date of each fund’s inception to 2019. Figures are approximate and will differ depending on actual investment dates and actual amounts invested. Remember: past fund performance does not predict future returns, but the below is a good illustration of what investors can do when investing through thick and thin over the very long-term!
Scroll over the chart to see approximate returns of investing the equivalent of the maximum deferral limit* on a monthly basis from 2005 through 2019 - a total of approximately $236,625.
The L 2050 Fund is the newest among all the TSP funds.
Scroll over the chart to see approximate returns of investing the equivalent of the maximum deferral limit* on a monthly basis from 2011 through 2019 - a total of approximately $150,417.
Maintaining steady contributions over the long term matters. For information on returns over a 40-year period when investing even small amounts, see “What Does $1,000 a Year Matter?”.
*The deferral amounts used in the examples above can be reached either as a combination of individual and matching contributions (for civilian and military BRS participants), or solely from individual contributions (for uniformed service members who do not receive a government match). Thus a civilian FERS worker making $80,000 would reach the $18,500 deferral rate for 2019 used in the examples above by contributing $14,500 and receiving $4,000 in 5% government matching contributions, for $18,500 in total contributions for the year. Civilian government workers who receive matching contributions can defer up to the maximum deferral rate — $18,500 in 2019, plus catch-up deferrals for those over 50 — and still receive a match of 5% of their regular salary.
For a complete discussion of the methodology used and calculations, see this page.