If you gaze at the investment options in your Thrift Saving Plan (TSP) or 401(k) and wonder how you are supposed to decide which choices to make, you are not alone. Fortunately, the lifecycle funds (L Funds) in the TSP and target-date funds in 401(k)s can eliminate this confusion.

The L Funds and target-date funds are professionally preselected investment portfolios. The funds have a date associated that represents the approximate year in which you will retire. For example, the Lifecycle 2050 fund assumes you will retire around the year 2050. Choose the one fund with your year, and you’re done.

These funds can be a great service, but you must verify they're meeting your objective.

Each fund actually is a combination of numerous funds constructed by professional money managers to meet your needs for retirement in the year you choose. The longer you have until retirement, the more aggressive (a greater proportion of stocks) the portfolio. The closer you are to retirement, the more conservative (less stocks) the portfolio gets. Yes, the portfolio automatically changes as the years go by, and you do nothing.

You might be liking this idea so far, but some might be worried about the heavy stock portfolio in your earlier career years. You hear “stocks,” and you think "crash." How do you protect against that? Easy!

When you invest on a regular basis (every pay period), you are using an investment tactic known as “averaging down” or “dollar-cost averaging.” This tactic thrives in down markets. Find more details in “The Power of Averaging Down.”

In your working years, you are investing to accumulate wealth. Averaging down in a high-stock portfolio achieves that objective. As you get closer to retirement, your objective slowly shifts to the preservation of value.

Be aware of this shift in your fund as you near retirement. Research your fund in your account, note the proportion of stocks to bonds (known as your allocation). The Lifecycle 2050 fund is 80 to 85 percent stocks now. Several years prior to retirement, the proportion of stocks to bonds should be 40 to 60 percent stocks. In retirement, you probably want a maximum of around 40 to 50 percent stocks.

This is a risk you need to manage. When you’re about five to seven years away from retirement, ensure your fund has the right allocation for your objective. Each fund manages the ramp down of stocks differently as you glide into retirement.