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TSP Highlights

Recent Developments Reshaping Your TSP in 2025

The Thrift Savings Plan (TSP) has introduced major changes in 2025 that directly affect how you save and invest for retirement. As a federal employee or member of the uniformed services, staying current on these updates helps ensure that your investment decisions remain aligned with your long-term goals.

This year marks both the introduction of a new Lifecycle (L) Fund and the retirement of another. These lifecycle shifts, combined with emerging expert insights, have generated momentum for re-evaluating your allocation strategy.

The Launch of the L 2075 Fund

As of June 30, 2025, the L 2075 Fund is now officially available. It’s designed for you if you expect to start withdrawing funds in or around the year 2075—likely placing your retirement horizon 50 years out.

Who Should Consider the L 2075 Fund?

If you were born after 2009 or plan to keep working for several decades, this fund could be a suitable match. The L 2075 Fund is:

  • Aggressively weighted toward stock-based funds (C, S, I Funds)
  • Intended to maximize growth during the early years
  • Designed to gradually transition to more conservative investments over the next five decades

How the Fund Fits in the Lifecycle Lineup

With the addition of the L 2075 Fund, the TSP’s suite of L Funds now offers retirement target dates in five-year increments from L 2030 to L 2075, plus the L Income Fund for those already withdrawing. The L 2075 Fund essentially replaces the L 2065 Fund as the most aggressive long-term option.

If you were previously using L 2065 but have a longer investment timeline, you may want to reallocate to L 2075 to maintain a growth-oriented portfolio.

Retirement of the L 2025 Fund

Another significant change in 2025 is the retirement of the L 2025 Fund, which was officially removed from the lineup on June 27, 2025. Participants who held assets in this fund automatically had their balances transferred to the L Income Fund.

What This Means for You

The L Income Fund is designed for current retirees or those actively withdrawing TSP assets. It focuses heavily on preservation of capital and income generation. It has a much more conservative allocation, with a heavy emphasis on:

  • Government securities (G Fund)
  • Fixed income (F Fund)

If you were still in L 2025 because of its moderate allocation, now is a good time to confirm whether L Income fits your current needs or if a more active reallocation is appropriate.

What to Do if You Missed the Transition

If you didn’t actively reallocate before the June 27 cutoff, your account is still safe—your funds are now in L Income. However, it may be more conservative than what your goals require. Consider reviewing your retirement horizon and switching to a fund that aligns more closely with your risk tolerance.

Glide Path Adjustments: Understanding the Strategy

Lifecycle Funds follow a glide path—a predetermined formula that gradually shifts your allocation from stocks to bonds as your retirement date approaches.

The earlier the target date of your chosen L Fund, the more conservative its current holdings. Conversely, the further out the date, the more aggressively it’s invested in equities.

In 2025, TSP has continued refining these glide paths to:

  • Increase stability for those nearing retirement
  • Maintain long-term growth for younger participants

The L 2075 Fund starts with the highest stock allocation in the TSP lineup. Over time, it will taper down to resemble the L Income Fund by 2075.

Expert Advice for 2025: Don’t “Set It and Forget It”

A critical shift in strategy is gaining traction in 2025: Lifecycle Funds should not be used as passive, one-time decisions. Experts now caution against simply choosing an L Fund and walking away from active monitoring.

According to recent professional insights:

  • L Funds automatically reduce equity exposure over time.
  • This means lower potential returns during the critical pre-retirement years.
  • Inflation risk is still present even in conservative funds.

What You Should Be Doing

  • Review your L Fund annually—especially if you’re within 15 years of retirement.
  • Compare the glide path to your personal inflation, income, and longevity risks.
  • Consider rebalancing or switching to a combination of core TSP Funds (G, F, C, S, I) if you prefer more control.

Comparing Lifecycle Funds: A Strategic Overview

Now that the L 2025 Fund is retired and L 2075 is active, here’s how the current Lifecycle Fund lineup stands in 2025:

L FundIntended Retirement YearCurrent Stock AllocationSuitability in 2025
L IncomeAlready retiredVery LowYou’re withdrawing now
L 2030Around 2030ModerateWithin 5 years of retirement
L 2035Around 2035Moderate-High5–10 years out
L 2040Around 2040High10–15 years out
L 2045Around 2045High15–20 years out
L 2050Around 2050Very High20–25 years out
L 2055Around 2055Very High25–30 years out
L 2060Around 2060Very High30–35 years out
L 2065Around 2065Very High35–40 years out
L 2075Around 2075Highest50+ years out

This table is not static. Each year, the allocation shifts based on proximity to the target year.

Reviewing Your Investment Strategy in 2025

If you haven’t already taken the time this year to evaluate your TSP strategy, now is the right moment. With both structural fund changes and expert insights emerging, 2025 is shaping up to be a pivotal year for rethinking your allocation approach.

Consider these steps:

  • Log into your TSP account and review your current fund selections.
  • Check your current contribution allocations—are you putting new contributions into the most appropriate funds?
  • Use the TSP Fund Performance charts and allocation tools to simulate outcomes.
  • Compare the expected glide path with your anticipated retirement timeline.

When to Make Changes

You can make interfund transfers (IFTs) or change your contribution allocations at any time. However, keep these points in mind:

  • TSP limits you to two IFTs per month, plus one additional transfer into the G Fund.
  • Any change made before noon ET takes effect the same business day; after noon, it applies the next business day.

Major Events That Should Trigger a Review

  • A job change or career move
  • Retirement eligibility or separation
  • Marriage, divorce, or death of a spouse
  • Changes to your risk tolerance or financial goals

Cost Considerations: Fees and Value

Even with the changes in fund offerings and strategy emphasis, TSP remains one of the lowest-cost retirement savings plans available to U.S. federal employees.

  • Administrative fees remain well below industry averages.
  • Lifecycle Fund expenses are shared proportionally across all investors.

While these costs are low, the bigger risk lies in misalignment. A conservative fund when you still need growth can cost you thousands over the long term. Conversely, overly aggressive allocations near retirement can expose you to market downturns.

Planning for Long-Term Success

Now that you know what’s changed in 2025, take time to reassess how your TSP works within your full retirement plan. TSP is only one part of your income picture. Social Security, a FERS or CSRS pension, and any outside savings also matter.

Make sure your TSP is pulling its weight by:

  • Matching your investment horizon and retirement age
  • Adjusting to market trends and inflation expectations
  • Staying aligned with your risk comfort level
  • Being regularly reviewed as part of your annual financial check-in

Make the Most of Your TSP in 2025

The retirement landscape is always evolving, and 2025 is no exception. With the introduction of the L 2075 Fund and the removal of the L 2025 Fund, you now have more tools to tailor your strategy to your personal goals. But tools only help when they’re used correctly.

Don’t let default allocations or passive investing decisions undermine the savings you’ve worked so hard to build. Make this the year you become more intentional with your TSP. If you need professional assistance reviewing your strategy or want help with more advanced planning, get in touch with a licensed agent listed on this website.

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