Transferring to a variable or fixed annuity


Q. What would be the advantage or disadvantage to a retiree of transferring their TSP to a variable and/or fixed annuity? What are the issues to look for, if any?

A. The main disadvantage of variable and deferred annuities is their high cost. The main disadvantage of a fixed immediate annuity, in the current environment, is a low payout rate. I don’t know a universal advantage to a variable or deferred annuity. The advantage of an immediate fixed annuity is guaranteed income for life.


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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 and view his blog at


  1. To make a blanket statement about costs and all annuities is idiotic! As an Investment Advisor, I’ve seen low fee Variable annuities as well as Retirement Income Annuities that grow your income account balance by up to a guaranteed 8% compounded return per year. There are advantages and disadvantages of every financial product available today.

    The main disadvantage of blanket statements such as the one above saying ALL annuities are bad is that it’s just plain wrong!

  2. You sound more like a salesman than an advisor. Mention a single deferred annuity with total expenses that are not at least FIFTEEN TIMES those of the TSP and we might have something to discuss.

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