Recent Topics
Toyota brand conventional (TGMO)
by Jaha24k
1 minute 3 seconds ago
Any synthetic oil rebates currently or soon?
by 07Piloteer
13 minutes 44 seconds ago
2018 Hyundai elantra motor oil
by kapama
45 minutes 54 seconds ago
SN Plus on shelves
by 03s
Today at 12:23 PM
Group 90 Battery - 45 vs 60aH rating
by The Critic
Today at 12:19 PM
Tire on Church 15 Passenger Van
by Gebo
Today at 11:58 AM
Battery Disconnect Switch?
by Pike51
Today at 11:35 AM
03 Maxima Cam sensor questions
by LeakySeals
Today at 11:09 AM
Wood Fairing?? Yes, and it's beautiful!
by webfors
Today at 11:08 AM
2006 Prius
by Kira
Today at 11:06 AM
Amsoil XL 5w30, 10K OCI, 2006 Expeditition
by meborder
Today at 10:18 AM
Mouse Visiting Car
by Ifixyawata
Today at 10:07 AM
Hit a shopping cart at 30mph
by LeakySeals
Today at 10:00 AM
Let's Talk Bed Pillows
by LoneRanger
Today at 09:21 AM
Changed Speedo Gear on 700r4 Tailshaft
by Pike51
Today at 09:20 AM
Which do you prefer: ZL-1 Camaro or GS Corvette ?
by Mr Nice
Today at 08:41 AM
CVT Discussion
by Sierra048
Today at 08:28 AM
Can't get Unifi AP V2 to work on TDS...
by WhizkidTN
Today at 07:34 AM
Need mini grease gun
by Duffyjr
Today at 07:02 AM
Mazda 6 O2 sensor - CA emission
by Chester11
Today at 06:57 AM
Newest Members
nmac9, Theraven, battleman13, Shassis, Santo
65277 Registered Users
Who's Online
96 registered (bdcardinal, BAJA_05, beast3300, AZjeff, 07Piloteer, 03s, 13 invisible), 1644 Guests and 35 Spiders online.
Key: Admin, Global Mod, Mod
Forum Stats
65276 Members
67 Forums
285653 Topics
4767168 Posts

Max Online: 3590 @ 01/24/17 08:07 PM
Donate to BITOG
Page 1 of 2 1 2 >
Topic Options
#4607954 - 12/19/17 08:14 AM Taking an annuity instead of TSP balance
grampi Offline


Registered: 10/08/06
Posts: 7762
Loc: OH
After doing some research on the subject, most people say not to trade my TSP balance for an annuity. However, in my case, an annuity may be a better option. I plan on using my TSP by taking a fixed amount every month. I don't plan to ever take a large payment from my TSP. The way I understand how an annuity works is once you start it, the amount you draw each month remains the same for the rest of your life, and the rest of your spouse's life, if you choose to take the survivor benefit. If I choose not to take an annuity and I keep my balance in the TSP, that money is still subjected to take big losses if/when the market fluctuates. I know I'd be giving up my balance if I choose to take an annuity, but there's also some piece of mind in doing so, knowing that my monthly annuity payment will never decrease, or worse yet, be completely gone due to the market tanking. What are your thoughts on this?

Top
#4607977 - 12/19/17 08:44 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
Donald Offline


Registered: 03/21/04
Posts: 20450
Loc: Upstate NY
If you do not take an annuity you should have 5yr to 8yr worth of payments you will take in safe investments and the rest in an index stock mutual fund.

You do not want to need to take payments out of a stock mutual fund when the market has tanked.
_________________________
2015 Subaru Forester 2.5 engine/CVT
2015 Ford F250 w/Powerstroke
2016 Subaru Crosstrek CVT (wife's)


Top
#4607980 - 12/19/17 08:46 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
ARCOgraphite Offline


Registered: 05/17/09
Posts: 11965
Loc: N.H, U.S.A.
Cost of living is not fixed, what about catastrophic needs for funds? What about family need after you and spouse are gone? Stuff happens; or as Lennon put it so succinctly, "Life is what happens whilst you are making other plans."**

Me, being 1/2 Scot, I'm NOT going to give an annuity sales person 10% (10,000.00 per 100K) to sell me this thing.

My, Mom had 300K in an annuity during the market crash in the mid 2000's Couldnt have had better timing; I did sell them due to uncertanty in the stability and solvency of the Insurance co's. during massive bank failures.

I would find a short term bond mutual fund and/or that earns about 4-6 %, open a brokerage account, and just leave it in there and draw what you need. This market bubble is about to bust. WAY over valued cant sustain, and many huge B&M are bankrupt. Looks bad for mid 2019.
____________________________________

** orig attrib to Saunders




Edited by ARCOgraphite (12/19/17 08:50 AM)
_________________________
2014 Nissan Rogue S CVT, OC#9 41392mi-QSUD10W30 + M110A CHAMP Filter; 2017 Subaru Crosstrek CVT OC#2 ?? mi-SOA/Idemitsu 0w20 + SOA Filter

Top
#4607981 - 12/19/17 08:47 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
JohnnyJohnson Online   content


Registered: 10/22/09
Posts: 2739
Loc: Wet side WA
All annuities are loaded more or less. You will have very little earning power. Roll it into an IRA of some kind like Fidelity where you can invest in something that has a chance of making some money. Don't listen to the annuity lie!

With the way over bought market right now find a short term solution that protect your money. When the market falls on it face then dollar cost average your way back into the market. Don't look for get rich quick schemes like Bitcoin!


Edited by JohnnyJohnson (12/19/17 08:51 AM)
_________________________
2004 Toyota Corolla 121668
Out: QSUD 5W-30 Purolator One 5030
In: Valvoline ML 5w-30 TG4967 117530 2-8-18
2006 Duramax 74047
Out: T6 5W-40 M1-303
In: T6 5W-40 XG9100 73752 4-22-18

Top
#4607994 - 12/19/17 09:07 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
Schmoe Offline


Registered: 05/12/03
Posts: 7256
Loc: Oklahoma
That's what I'm planning on doing.
_________________________
01 Supercrew Lariat 4X4
06 Accord EX-L V6
14 CRV EX-L



Top
#4608010 - 12/19/17 09:15 AM Re: Taking an annuity instead of TSP balance [Re: JohnnyJohnson]
Mr Nice Offline


Registered: 09/12/04
Posts: 21187
Loc: Orlando, FL
Originally Posted By: JohnnyJohnson
All annuities are loaded more or less. You will have very little earning power. Roll it into an IRA of some kind like Fidelity where you can invest in something that has a chance of making some money. Don't listen to the annuity lie!

I agree to avoid any annuity. What is the balance of TSP ?


Top
#4608023 - 12/19/17 09:29 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
salesrep Offline


Registered: 08/22/03
Posts: 3600
Loc: lllinois
If you are disciplined, keep the money, invest it conservatively, and you will get similar monthly payments AND keep the principal.
_________________________
High quality Specialized Lubricants pay for themselves!

Top
#4608053 - 12/19/17 09:55 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
csandste Offline


Registered: 05/31/02
Posts: 1178
Loc: St. Peters, Missouri
My girl friend (before I met her) ran into a scammy annuity salesman-broker who stuck a bunch of her money into variable annuities, including placing annuities into IRA's (aaagh!). I got her to switch everything possible into the cheapest Schwab index products (she wanted a local office). The annuities, however, had to roll over because of tax considerations, although to considerably cheaper products.

The Schwab guy, who runs the only office in a county of 400,000, knew nothing about annuities because he had never sold one. People who look out for their clients don't sell annuities, and annuities ARE sold. No body in their right mind (IMO) would put money into a product like that unless they are hoodwinked by someone who's looking to grab a ton of hidden money on the sale.
_________________________
2017 Kia Soul Plus-- Valvoline MaxLife Blend 5-20

Top
#4608056 - 12/19/17 09:58 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
Mr Nice Offline


Registered: 09/12/04
Posts: 21187
Loc: Orlando, FL
Time expired and I couldn't edit.

REITs pay 9-13% dividends, some pay monthly and others pay quarterly.
Lots of retired folks like that nice steady cash flow $$$...

Annuities are a big No-No, lots of fees and you might get penalized (more $$$ fees) to pull your money out.

Top
#4608067 - 12/19/17 10:10 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
greenjp Offline


Registered: 05/19/04
Posts: 1306
Loc: Germantown, MD
I think you need to look a little closer at your TSP options (I'm assuming you're talking about a federal gov't Thrift Savings Plan?). You can move any portion of your current balance into the G fund which is essentially a federal bond fund with zero risk of losing principle. TSP management costs are very low so it's unlikely there's anything to be gained from moving it out and into a private type account.

jeff

Top
#4608084 - 12/19/17 10:25 AM Re: Taking an annuity instead of TSP balance [Re: JohnnyJohnson]
Brybo86 Offline


Registered: 10/08/11
Posts: 2947
Loc: Chicago, IL
Originally Posted By: JohnnyJohnson
All annuities are loaded more or less. You will have very little earning power. Roll it into an IRA of some kind like Fidelity where you can invest in something that has a chance of making some money. Don't listen to the annuity lie!

With the way over bought market right now find a short term solution that protect your money. When the market falls on it face then dollar cost average your way back into the market. Don't look for get rich quick schemes like Bitcoin!

This times one BILLION
Annuities are only good for the person who is SELLING THEM
_________________________
08 Honda Accord EX-L 2.4L M1 EP 0w20 145k
01 Kymco People 50
95 Lexus LS400 M1 AFE 0w30 193k
95 Yamaha Jog

Top
#4608087 - 12/19/17 10:26 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
surfstar Offline


Registered: 09/16/04
Posts: 5998
Loc: Santa Barbara, CA
I think there needs to be clarification here:

"Taking an annuity" - is a way of accessing your TSP balance, it is NOT buying a private/open market annuity. That is what everyone is assuming.

https://www.tsp.gov/PlanParticipation/LoansAndWithdrawals/annuities/options.html


OP, get a pot of coffee and some free time and read as much as you can intake:
TSP annuity search at Bogleheads.org


Edited by surfstar (12/19/17 10:29 AM)
_________________________
2016 Golf Sportwagen 5MT M1 0w40 LC20 RLI BioPlus
my other vehicle is a Roth IRA

Top
#4608089 - 12/19/17 10:27 AM Re: Taking an annuity instead of TSP balance [Re: Mr Nice]
grampi Offline


Registered: 10/08/06
Posts: 7762
Loc: OH
Originally Posted By: Mr Nice
Originally Posted By: JohnnyJohnson
All annuities are loaded more or less. You will have very little earning power. Roll it into an IRA of some kind like Fidelity where you can invest in something that has a chance of making some money. Don't listen to the annuity lie!

I agree to avoid any annuity. What is the balance of TSP ?



It will be ~ 160K when I retire...

Top
#4608107 - 12/19/17 10:35 AM Re: Taking an annuity instead of TSP balance [Re: grampi]
greenjp Offline


Registered: 05/19/04
Posts: 1306
Loc: Germantown, MD
A TSP annuity is no different from a private one. It's just arranged via TSP and issued by MetLife.

Top
#4608110 - 12/19/17 10:38 AM Re: Taking an annuity instead of TSP balance [Re: greenjp]
surfstar Offline


Registered: 09/16/04
Posts: 5998
Loc: Santa Barbara, CA
Originally Posted By: greenjp
A TSP annuity is no different from a private one. It's just arranged via TSP and issued by MetLife.

Because of the vast purchasing power of the Feds, its likely that it has lower fees and/or is similar to a private one that would require much research to insure that the purchaser is not being taken by a salesman.


Grampi, have you read: https://www.tsp.gov/PDF/formspubs/tspbk02.pdf yet?

Because of all-time market highs, it is a very good time to "cash out" and "buy" an annuity. There is that. You may miss out on future returns, but you would be locking in all of the recent run-up.

Top
Page 1 of 2 1 2 >