Q. I will be retiring in August 2015 and am looking for advice on taking my TSP in annuity payments or monthly installments. I understand that if I go with the annuity, the money no longer is in my control, but I will have a guaranteed income for life. Whereas with the monthly payments I still have control to change the monthly payments on a yearly basis if I so desire but run the risk of outliving my funds. I am leaning toward the monthly payments since I am going to play it rather conservatively with my TSP funds in retirement. Do you have any recommendations?
A. As long as the payout rates on annuities are near historic lows, it’s harder to make the case for a TSP annuity than it otherwise would be. Just make sure that you do the probability analysis and manage your account carefully to make sure that you don’t unexpectedly run short down the road. It’s not the first years of retirement that are the toughest financially, it’s the last.