Statistics show that people are living longer, healthier lives. It's possible that you could spend two, maybe three decades in retirement. You'll need your TSP account to provide you with current income when you need it and continuous income to last your entire lifetime.
Your asset allocation is an important consideration while you are in retirement because you'll need sufficient income to meet your current expenses. You'll also need some growth to guard against the eroding effects of inflation. As you are drawing down your account balance, you should be careful not to leave yourself exposed to a great deal of volatility as you may find it impossible to recover from sharp declines in your account's value.
If you are living in retirement and your account is heavily invested in the TSP stock funds (C, S, and I), consider shifting to a more conservative allocation, especially if you do not have other retirement funds safely invested elsewhere or other guaranteed sources of income.
While you are in retirement, it's important to monitor your financial situation. On a regular basis, you should:
- Review your investment experience and your TSP balance.
- Assess your current income needs.
- Consider your risk tolerance and make any necessary changes to your asset allocation.