Browsing: annuity

Q. I am under FERS and considering retiring in 2016 at age 66 with 32 years of service. I recently attended a retirement class through work, and they recommended rolling over my TSP ($400,000) into an Allianz Fixed Index Annuity with a guaranteed 6 percent growth and no downside. It has a .95 percent annual fee, so I’d lose almost $4,000 from Day One. Being a skeptic I feel there has to be even more of a downside, but there seems to be as many people online that favor as oppose. What is your opinion of these fixed annuities?

Q. If I buy an annuity with my TSP funds when I retire, will there be two separate annuities? One for my traditional TSP account, and one for my Roth TSP account? Or, will the Roth balance be merged into to one annuity tax free?

Q. I am a CSRS offset employee. I retired from federal service when I reached age 55 with 30 years service. When I reached age 62, my CSRS offset annuity was reduced by the Social Security retirement applicable, even though I was not drawing Social Security. I did not apply for Social Security until I was 65. Is there a way to recover the Social Security payments I lost from age 62 to 65?

Q. Earlier in my career I was employed under the Civil Service Retirement System. When I left the government, I withdrew my retirement contributions. Several years later, I was rehired by the federal government and brought in under the Federal Employees Retirement System. Now I’m contemplating retirement and have the option to deposit my CSRS withdrawal in order to receive a CSRS annuity in addition to a FERS annuity. Can I directly repay CSRS with a portion of my TSP funds?

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…

Q. I plan on making the full survivor (50 percent) annuity reduction at retirement. I understand the cost is 10 percent, but I have received different answers as to the ongoing cost. One expert said the cost is calculated at 10 percent at the time of retirement. The other expert said the 10 percent cost also grows with each annual COLA so that the ongoing cost is always 10 percent of the then-current annuity payment after COLA. Which is correct?

Q. I am a FERS retiree and following your advice, I have not touched my TSP. This year I must start Required Minimum Distributions and am thinking of having TSP buy an annuity. The news says “the Fed” may raise rates soon. Will that raise the TSP annuity interest rate?

Q. Your April 2 column contains an answer to a fellow who mentions “The state I live in only insures annuities up to $250,000 and I’d like the remainder of my TSP balance to be insured by purchasing a second annuity from a different provider.” Do some/all states insure annuities? That’s significant to me: I’d been anxious about purchasing a lifetime annuity from MetLife upon retirement since Tammy Flanagan mentioned that the annuity is not at all guaranteed, so that if MetLife goes bankrupt the annuity could be lost. Can you provide an answer, perhaps in a future column?

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