Voluntary contributions


Q. On several occasions, you have stated that taking your Voluntary Contributions account as additional annuity (which pays about 7 percent to 8 percent depending on age) is not such a good deal compared to investing the money and taking the investment earnings. But would you say that it is a very good deal compared to using the account to purchase an annuity from an insurance company which pays way less than 7 percent to 8 percent (say 3 percent)?

A. It would depend upon the specifics of the annuity you’re considering and your circumstances. It’s impossible to give a responsible answer to such a general question.


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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