Q. I visited my Roth IRA ($20,000-plus) adviser for a one-year review a few days ago. She informed me it would be better to invest my $150,000-plus with Edward Jones instead of the mandatory MetLife annuity required by TSP. Do I earn interest on my annuity and can I raise my yearly payment, or even pick the dollar amount? Does MetLife provide this information so I can make a educated decision? What do you suggest?
A. It is not mandatory that you use your TSP money to buy an annuity. There are really two questions here:
1. Should you continue to invest and manage your TSP assets, or use the money to buy an annuity?
2. If it is better for you to continue to invest and manage the money, where is the best place to do this?
It’s not possible to determine the answer to Question 1 without a comprehensive analysis of your lifetime financial needs. Since buying an immediate annuity is an important, and irreversible, decision, you should make this decision carefully.
The answer to Question 2 is “The TSP”. There is no better vehicle for retirement investing, anywhere.
I suggest that you stop trusting a paid sales person, who has a serious conflict with your interests, to provide you with financial advice. You’re confusing a sales pitch with advice, and the two are not at all the same. Take your Roth IRA to a discount broker and keep the rest in the TSP for as long as possible. While it’s not the perfect solution, it’s better than trusting your money to the equivalent of a Blackjack dealer.