By Mike Miles
March 11th, 2013 | Uncategorized
Q. I am a 53-year-old recent retiree (I was offered a Voluntary Early Retirement Authority through the Postal Service and accepted it). Is there a penalty to move my Thrift Savings Plan account to an immediate fixed annuity? If so, what would that penalty be?
Additionally, I heard that within one year of retirement, my TSP account should be transferred to a civilian account (IRA, savings, etc.) What exactly is the time frame for that?
A. The only penalty for using your TSP account to purchase an immediate fixed annuity in retirement is that you’ll be locking in historically low interest rates for life, so be careful. You are not required to roll over your TSP account and may continue it for life. You should do everything you can to keep your money in the TSP for as long as possible, since it is superior to any other investment account you will find. Your TSP should be the last account you tap for retirement income.
Mark Sneed Says:
March 11th, 2013 at 2:54 pm
Annuities aren’t for everyone, but if you’re curiosity has peaked and you’re looking at alternatives to traditional investment strategies, I strongly suggest you check out this website, especially their video library. They have a page on fixed annuities, too – lots of easy-to-digest info!