Lifestyle versus Lifecycle Funds

One type of fund under consideration would be a lifestyle fund, in which the investor would decide a preferred level of investment risk and a portfolio would be crafted among the TSP stock and bond funds to reflect that risk. In the other, called a lifecycle fund, investors would project when they expect to withdraw the funds-not necessarily at retirement-and a portfolio would be crafted and then adjusted to become more conservative as the withdrawal date approached. According to an analysis prepared for the board, the latter type of fund has several advantages in that it is easier for investors to understand and does not require the investor to reconsider the desired mix of investments over time. Whether the TSP will add one or both likely won’t be decided for several months, and it likely would be months after that before any new fund or funds became available.