Turning TSP Money into an Annuity

The Thrift Savings Plan is a retirement investment made available to federal and uniformed workers. Withdrawals can be made in a large sum once or paid monthly or form an annuity; however, an annuity is the least common choice. Fewer than 1% of all withdrawals from TSPs are used to buy annuities.

Before completely dismissing it, you should know what it is and how it works. Then, you can tailor the TSP annuity benefit to satisfy your specified needs with the conventional retirement benefits given by FERS and CSRS. 

DIFFERENT TYPES OF ANNUITIES PROVIDED BY TSP

A TSP account holder can select an annuity from one of three available options:

Single life

A single-life annuity offers you steady payments for the rest of your life.

Joint life with a spouse

You will continue receiving payments from a joint life with a spouse annuity as long as you and your spouse are alive. Upon a partner’s passing, the survivor will continue receiving annuity payments until their death.

Joint life with someone other than your spouse

This refers to an annuity paid out for your lifetime and the lifetime of another person you choose (who is not your spouse). Even when one of you dies, the other will continue to receive annuity payments for the remainder of their life.

Those considered to have an insurable interest in you include your 

• Former marriage partner, 
• Biological or adoptive relatives closer to you than first cousins, and 
• Those with whom you live in a relationship, which forms a common-law marriage in countries that recognize such unions.

NOTE THAT:

1) The TSP is not an annuity; instead, it transfers money to a private commercial company.

2) You may also mix different annuity options with various available features of your choice, including a predetermined payout made to you after ten years. The payments will rise with time. The standard repayment sum will increase by 2% per year. It is necessary to know that not all annuity features can be combined with the basic annuity types. 

3) Let’s say you and the other annuitant pass away before the annuity payments equal the account balance used to acquire the annuity. In such an event, the difference will be returned to the beneficiary in cash. Payments will go to your beneficiary if you pass away during the first ten years.

4) A joint life annuity may provide a 100% or 50% survivor payout. If you have a joint annuitant, your monthly annuity payments will stay the same (100%) or be reduced by 50% upon the first death.

5) If you are a married participant with a balance over $3,500, your withdrawal choice must meet the requirements of your spouses’ rights.

6) Suppose you and your spouse are FERS members. In that case, your spouse will be eligible for a joint and survivor annuity with a 50% survivor benefit, level payments, and no cash return feature unless you sign a written waiver of this right. As a married CSRS member, the TSP must notify your spouse of your withdrawal election.

Contact Information:
Email: [email protected]
Phone: 8007794183

Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”

Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.

A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.

Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.