Browsing: TSP annuity

Q: Can you run through a few scenarios with different annuity rates? [The Thrift Savings Plan annuity interest rate of] 3.625 percent is a fairly low rate to lock in for the long term, especially with inflation. How does the monthly annuity distribution look as interest rates change? For example, what would the distribution be for $100,000 at 5 percent, 10 percent or higher? The TSP annuity calculator doesn’t give me the ability to run these scenarios. A: I won’t run rates for you, but you can estimate the payments with a calculator and the knowledge that the payment will…

Q: I was reading a question submitted to you about the Thrift Savings Plan annuity rate being 3.625 percent. What does this rate have to with withdrawing from our accounts in retirement in the form of an annuity? If I have $200,000 in my account and buy an annuity with it, once it is purchased I get the monthly amount for the rest of my life, Right? I don’t understand what this annuity rate is for. A: The annuity rate is used to determine, at the time of purchase, the size of the payment you’ll receive in exchange for the…

Q: Is it possible to set up monthly payments from your Thrift Savings Plan account and then later have the TSP use part of your funds to purchase an annuity while continuing those payments? Or must both withdrawals be set up at the same time? A: It is not possible to take a partial withdrawal for a TSP annuity while continuing monthly payments.

Q: I will be retiring, hopefully, at age 56. I have been investing in the Thrift Savings Plan since 1987, contributing the maximum amount allowed (15 percent). At age 56, can I set up an annuity with TSP requesting a small amount each month and still receive interest on the amount left in my account? A: Yes, as long as you haven’t already taken a partial withdrawal. Use a partial withdrawal to purchase the annuity and leave the rest in your account until you need it.

Q: I am 57 years old and I have 34 years of service, including 21 years of active duty in the Navy. I have already paid my military deposit amount in full. My Thrift Savings Plan account has $200,000 in it. If I retire next year, can I get half of that amount in lump sum, and can I invest the remaining $100,000 in an annuity? If I can, when would I start receiving the annuity?    A: Yes, you may request a partial lump-sum withdrawal, if you have not already done so, and then later request a full withdrawal…