TSP

If you spent your career as a federal worker in the United States, then you likely contributed to a Thrift Savings Plan, also known as a TSP. As retirement approaches, you may be wondering: What should I do with my TSP account?

While you can set up an installment plan with most TSPs, your payments are limited to the lump sum value of the account. You can also withdraw the lump sum, and then budget accordingly. But in either case, many people have trouble budgeting their money wisely, leaving them without enough assets during retirement.

This is why turning a TSP into an annuity is such an attractive option. With this option, you are handing over the lump sum of your TSP in exchange for guaranteed monthly payments for the rest of your life.

Wondering if this option is right for you? Here are some of the pros and cons of turning a TSP into an annuity:

Pros:

• Provides you with a guaranteed monthly income for the rest of your life.
• Helps you avoid overspending your retirement funds.
• Gives you peace of mind to fully enjoy your retirement.

Cons:

• You no longer have access to your lump sum savings.
• The monthly payments might not keep pace with inflation.
• You may have to pay taxes on your monthly payments.

If you’re interested in turning your TSP into an annuity, contact Rocksteady Financial Group. Our experts can help you create a TSP usage plan that allows you to make the most of your retirement.