An important change is about to take place in the Thrift Savings Plan (TSP) Lifecycle (L) Fund lineup. On Monday, June 30, 2025, the TSP will introduce the L 2075 Fund, designed for federal employees planning to begin withdrawals in 2073 or later.
According to the Federal Retirement Thrift Investment Board (FRTIB), the agency which oversees the administration of the TSP, the L 2075 Fund is an aggressive fund ideal for younger investors—those born after 2009.
At the same time, the L 2025 Fund will be retired and merged into the L Income Fund, marking a natural transition as it reaches its target date. This mirrors previous transitions, such as the L 2010 and L 2020 Funds, which were also rolled into the L Income Fund upon maturity.
June 27, 2025 will be the last day for the L 2025 fund. It will be automatically transitioned into the L Income Fund after the markets close that day; no action will be required from TSP participants.
What Are Lifecycle (L) Funds?
L Funds are target-date retirement funds tailored to help federal employees and members of the uniformed services invest based on when they expect to start withdrawing their TSP savings. Each fund is a diversified mix of the five core TSP funds—G, F, C, S, and I—and automatically adjusts its asset allocation over time.
As the target date approaches, the fund gradually shifts from a more aggressive, growth-oriented mix to a more conservative, income-focused allocation. This “glide path” helps manage risk as retirement nears.
According to investopedia.com, glide path refers to a formula that determines the asset allocation mix of a target-date fund, such as the TSP’s L Funds, based on the number of years remaining until the target date. As a fund approaches the target date, the glide path typically results in a more conservative asset allocation, which includes a higher proportion of fixed-income assets and a lower proportion of equities.
The glide path for the L Funds is adjusted automatically on a quarterly basis (every 3 months).
Available Lifecycle Funds
With the addition of the L 2075 Fund and the retirement of the L 2025 Fund, the TSP will offer the following Lifecycle Funds:
- L Income (for those already withdrawing)
- L 2030
- L 2035
- L 2040
- L 2045
- L 2050
- L 2055
- L 2060
- L 2065
- L 2070
- L 2075 (new as of June 30, 2025)
Each fund is designed to match a specific retirement horizon.
How Federal Employees Can Use L Funds
L Funds are an automated option for TSP participants who want a diversified portfolio that evolves with their retirement timeline. The TSP website states, “They [Lifecycle Funds] were designed to let you invest your entire portfolio in a single L Fund and get the best expected return for the amount of expected risk that is appropriate for you.”
Based on this principle, this is the general approach:
- Choose the fund that matches your retirement year: This ensures your investments adjust in their level of risk over time to become more conservative as your retirement date approaches.
- Let the fund do the work: No need to rebalance or adjust your portfolio manually—the L Fund does it for you. According to the TSP website, each L Fund is rebalanced at the end of every trading day to keep the percentages of the core TSP Funds it contains in line with its target investment allocation.
- Reevaluate periodically: If your retirement plans change, you can switch to a different L Fund at any time.
Everyone’s financial situation is different, so you should always consult a financial advisor for advice and to assist with developing a retirement savings and investment plan that meets the needs of you and your family.
