TSP best plan available


Q: I retired under the Civil Service Retirement System in 2008. I am 57 and my wife is 56. The financial adviser at our credit union recommends that I transfer $100,000 (half of my Thrift Savings Plan balance) from my TSP account to purchase a variable annuity from Prudential. It is called a Spousal Highest Daily Lifetime 6 Plus. The brochure guarantees that a $100,000 investment will double to $200,000 after 10 years. What are the pros and cons of such a transfer?

A: I won’t comment on the pros and/or cons of a specific investment product. I continue to believe and assert that the TSP is the best retirement investment vehicle available — period. The credit union employee is a salesperson, being paid to sell products, not a financial adviser. I’ll bet that your purchase will pay the salesperson and/or their firm somewhere between $4,000 and $10,000 — enough to influence their recommendations. For the record, I have never recommended the purchase of a variable annuity over the TSP.


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