The number of Thrift Savings Plan investors moving into the lifecycle funds is continuing to grow.
As of July 31st, 606.828 people are investing in a lifecycle fund. As of December 31, 2008, 584,468 participants were investing in an L fund.
How Investors Use L Funds
But it is somewhat surprising to look a little further. The concept behind the L funds is that a person can put money into a fund based on a projected retirement date. It makes it easier to invest your retirement funds in one place and the allocation becomes more conservative as you near retirement age.
In reality, the number of TSP participants with their entire account balance invested in one lifecycle fund is fairly small. 4% of FERS participants have their money in one fund. For CSRS participants, 3% of participants have all of their TSP money invested in one lifecycle fund.
G Fund Is the Most Popular TSP Fund
Currently, Thrift Savings Plan Investors who are under the FERS retirement system have 10% of their money in an L fund. The biggest chunk, 48%, is in the G fund and 23% is in the C fund.
Here is a chart depicting how TSP investors under the FERS retirement system have elected to invest their retirement funds: