Managing TSP options

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Q. I will retire in December. I have $300,000.00 in the G fund as of now. I want to have  a monthly payment of $1,500 until my money runs out around 20 years or longer. What is a good strategy to put all my money in the 5 accounts that the TSP offers?

A. You’re looking for a 6 percent initial withdrawal rate. If you want to ensure that your money lasts at least 20 years, you’ll either need to hire a good investment manager, or use the money to buy an immediate fixed annuity. You should also consider the need for the monthly payments to keep pace with inflation over the years, which adds an interesting complication to the problem. You can email me directly at mmiles@variplan.com if you’d like to consider the investment management option, which will support this withdrawal rate with full inflation adjustments while you retain control of, and access to the principal. Before you decide how to proceed, you should objectively compare all of your options.

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