Q: I plan to retire sometime around age 55 with 28-plus years of federal law enforcement service. I am aware I can make a one-time partial Thrift Savings Plan withdrawal. My question is: Upon retirement, can I request that TSP purchase a Met Life annuity for me with 75 percent of my TSP account and leave the rest untouched and, hopefully, growing until I decide to make monthly withdrawals or turn 70 1/2? The partial withdrawal form does not seem to provide this option, and neither does the full withdrawal form.
A: Unfortunately, if you use part of your account to purchase an annuity through the TSP, you must withdraw the remainder in a lump sum, via monthly payments, or some combination of the two. You could take partial withdrawal and use the money to purchase an annuity on the retail market, if you can find one that’s attractive. Or you could buy the TSP’s annuity and then roll either the lump sum or monthly payments into an IRA at a discount broker that lets you invest in low-cost index funds similar to the TSP’s.