TSP inheritance


Q. My TSP question is based on an earlier answer you gave someone else: “A life annuity means that payments continue, on an accrual basis, until the annuitant’s death, unless a survivor benefit option is elected at the time of purchase.” When I die, are the funds remaining in my TSP inheritable by my adult
child?  If not, why should I leave it in the TSP not knowing when I will die? If yes, can the funds remaining in my TSP be rolled into an IRA or TSP that my adult child owns?

A. If you use the funds in your TSP to purchase a life annuity, the funds are no longer yours to leave behind. They become the property of the insurance company that provides the annuity. If, instead, you leave funds in your TSP account, the balance left in the account when you die will pass to the named beneficiary(ies).


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Mike Miles is a Certified Financial Planner licensee and principal adviser for Variplan LLC, an independent fiduciary in Vienna, Virginia. Email your financial questions to fedexperts@federaltimes.com and view his blog at money.federaltimes.com.

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