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Showing posts with the label TSPSingleAnnuity

Avoid the Thrift Savings Plan (TSP) Annuity.

The Federal government contracts with an insurer to provide retiring employees with a stream of income for life, called an annuity. An annuity is income insurance. You give the insurance company a lump sum of money at retirement with your TSP balance and the insurer gives you a monthly stream of income for life. If you live to 200 years old, the insurance company is obligated to pay. The insurance company benefits because they keep your annuity contribution once you die. You benefit because you never run out of money. You have the option to do a single life TSP annuity or a Joint Life TSP Annuity. The Single life annuity option pays a stream of income until the annuitant dies. Once the annuitant dies, the money stops. With a joint life annuity, the annuitant and their spouse are guaranteed to receive a stream of income for both their lives. If one spouse dies, the other spouse will continue to receive the annuity until they die. If you have a spouse and want to g