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Which is better, a life-time guaranteed annuity or a withdrawal over time? I noticed the Lifetime annuity calculator is no longer available on TSP.gov. replaced with another caclulator that tells you how timed withdrawals would worked based on the interest rate you predict (and asks a ridiculous question: "How long do you expect to live?" If I could answer that I would be smart enough to time the market perfectly!
Annuities pay you some ridiculously low rate right now. I like the withdrawal option and still trade.Quote:
Originally Posted by Moolbart
If we knew the actual answer then planning for retirement would be a breeze. The real question is how long dou you want to LIVE in retirement.Quote:
Originally Posted by Moolbart
Seriously though, family medical history and your current health situation can allow you to predict a fair duration. Nothing is certain except death is inevitable. I personally estimate to 90 which is 54 years older than my father, 16 years older than my grandfather.
I am against annuities. It's my money, and I want use it when I want. (stoopid commercial, but enlightening)
Good luck with your decision.
I feel like your pension is sort of an annuity and so tsp should be kept as an investment and withdrawn as needed. Buying an annuity means the lump sum is gone and you get payments. If you die early your remaining tsp is your survivors ! I say don't give it away. Do your own annuity and keep the tsp lump sum.
make sure ALL of YOUR money is in your procession.
I read about these plans first during Clinton's first term. since then I have done the 5% matching and that's it, the rest goes to private accounts. Now it looks like it might be time to stop the 5% also.
http://www.tsptalk.com/mb/tsp-talk-n...t-ceiling.html
On Poland and Detroit. Not For the Faint of Heart. | Barnhardt
"As I have written recently, the Obama regime is already using pension money to manipulate the so-called debt ceiling, namely the Thrift Savings Plan money, which is the government 401(k) equivalent for government employees, government retirees and the U.S. military. Yeah, all of these US military officers who are “going along to get along” so they can “make it eight more years until I get my pension” are chasing money that is already gone. Morons. The regime has already taken it, and all that is sitting in those accounts are worthless IOUs issued by neo-Stalinist oligarchs. They’re just too uninformed and deluded to understand this. This is why the national debt figures published by the government have not changed in months and months. They are using the TSP money to fraudulently offset public debt on the balance sheet."
The regime has been fairly open about its plans to “nationalize”, read CONFISCATE, this collateral and implement a system of “mandatory retirement savings accounts”, which will be just another confiscatory redistribution into the hands of the oligarchs and their cronies. This what Poland just did. This is what MF Global was in its essence. This is what Cyprus was, except the Cypriot confiscation was done to demand deposit accounts instead of retirement accounts, which is now termed a “bail-in” – but it is all of the same stripe, namely the utter destruction of the notion of private property and the redistribution of all wealth into the hands of the oligarchs. In Poland, the private pension paradigm has now also been destroyed because no one will want to put money into a private pension after this knowing that it can and will be stolen by the government at any time with zero redress.
Here's an article that explains some of my concerns about market behavior right around the time I am looking to retire (2017-2022), and which may affect the date I actually do retire, as well as influence portfolio management post-retirement. It's not just about portfolio growth pre-retirement, it's about how and when and how much to withdraw, relative to market behavior, when the time comes. TSP withdrawal options are way too limiting, which is why I may roll at least half out when the time comes, so I'm not forced to pull more than I want, and yet able to pull enough to reasonably live on, including infrequent but more costly expenditures that are reasonably foreseeable. like a new roof or some such. and maybe just maybe put some excess tsp withdrawals into Roth (not tsp) after paying taxes, since my family history of life expectancy is long, haven't fully figured that part out yet, but I will.
Under the Hood: What You Need to Know About Sequence of Returns in Retirement
MoolBart,
Bucketize your assets. I like the 'Buckets of Money' approach. And, having part of your retirement assets in an inflation adjusted annuity is fine. That would be in Bucket 1.
However, like the others before me, it seems kinda dumb to lock in a growth rate for thirty years that is dirt cheap. If you are making 2% in a 10% inflation environment you will be broke before you know it. I don't know if the annuity is inflation adjusted, but I really do not like to lose control of my mid-term and long-term growth assets. If you commit all of your TSP assets to an annuity than all it becomes is another pension.
If you are of Valkyrie's mindset a couple of things to think about:
- Yup, 'your' Social Security can be 'modified' by aged lawyers. Remember, the Social Security promise was made by politicians decades ago - not by the current crop of failed lawyers. Those previous Grandees bought your vote by promising a growth rate of your Social Security assets that they did not meet. They invested in the 'G Fund' and promised 'F Fund' returns!!! So, if you want to be safe assume that you will receive about 75% of the promised Social Security benefit. Can't happen you say. The Gubmint is my Benevolent Mommy!!! The oldsters will rise in retribution and burn down the neighborhood!!! Nope, in 1993 under President Clinton Social Security benefits were taxed for the extremely rich making more than $40K. Anyone out there remember when Social Security was not taxed. Since I will have other retirement assets and because I will not be scraping slop out of an Alpo can I will have my Social Security taxed. Even with my enormous middle-class retirement income the Gubmint will take a sizable slice out of Social Security. So, there...
- Yup, 'your' Federal Pension benefit can be 'modified' by the current and future crop of aged lawyers. Folks, there ain't no 'lockbox' where they place your pension contributions. They buy 'G Fund' assets and promise 'F Fund' returns. Yea, another Social Security promise!!! Again, count on receiving 75% of the promised benefit.
- Nope, your 'G Fund' assets can be 'borrowed' by a Federal Gubmint that annually cannot spend to revenue but the F/C/S/I assets are not directly controlled by the Benevolent State. Assets in the F/C/S/I can only be grabbed indirectly by devices like taxation. If the Gubmint makes noises about grabbing the Trillions in private retirement assets then wash the money off-shore and skip out. Costa Rica is nice this time of year!!!
My advice is to talk to a real retirement adviser. Your Social Security, your pension, and any annuitized TSP assets are safe and part of Bucket 1. The rest of your TSP should be scientifically invested in Buckets 2 and 3 so you have enough growth to deal with longevity.
Hi everybody, is there anybody in retirement using annuitywith cash refund as one of their TSP withdrawal options?
Or anybody knowledgeable about annuity with cash refund?
I am planning to do part of my money with annuity with cashrefund and another part with specific monthly withdrawals.
suggest u do a search "tsp annuity pros and cons", basically your money will not be yours anymore, metlife (present annuity provider, they were in the news yesterday about splitting up) will control it and control how much u get based on interest rates. there are annuities out there whereas once u die and monies left over, they keep all, read that fine print, don't be like nancy.Quote:
Originally Posted by Maricar19
IMHO keep control avoid annuities like the plague and manage it yourself with safe low risk investments such as ladder high rate CDs. suggested pros Rick Edleman and/or the mutual fund store.
A few months back when we talked to our financial advisor about my wife's 401k we talked about annuities. He mentioned that if she optioned for the annuity it would earn about 4% a year.
I opted for the lifetime withdrawal which still gives me the option to switch to a set monthly amount in the future if I choose. The option pays about 3 1/2% per year in monthly payments based on my closing balance in December.It still allows me full control of my TSP and goes up or down based on how I do each year. It will also automatically adjust at 70 to cover the minimum withdrawal requirement.
Your pension is already an annuity therefore you should split up your retirement and get payments from your TSP if you need them. Payments based on life expectancy to avoid 10% penalty if you're under 59.5. If you are over 59.5 you can set the monthly payments each December to a different amount based on your needs or just take a lump sum.