Q. I am retiring under FERS in a few months, and am looking for recommendations on how to best invest my Thrift Savings Plan dollars. I believe my options are to buy a MetLife annuity, leave the funds in my TSP account until I turn 71 years old (I am now 60), or roll the TSP dollars into an IRA or other type of investment account. I have approximately $350,000 and will receive my FERS retirement and eventually Social Security. Do you have any recommendations to roll the dollars into an investment account that I could occasionally draw from and that could draw interest, and could you identify pitfalls relative to rolling TSP to an investment account? I know that I will be required to pay taxes on my withdrawals.
A. I recommend that you leave your money in the TSP for as long as possible. It’s the best investment environment there is. Rolling your balance into an outside investment account will burden you with higher fees, greater risk, lower expected rates of return and the loss of access to the G Fund.