Why should I convert tsp into annuity?

[RazorCat]

The only financial advisers I've ever found that will tell you an annuity is a good idea are those who are trying to sell you one.
No way I'd ever give up control of my money for a few more dollars a month up front.
I based my retirement income on my pension, and an annual return of 3.5-4%. My returns on the percentage of money I left in TSP since retirement at the end of 2013 have been more than double, almost triple that goal without a huge amount of work on my part.
The remainder I transferred to an IRA that's invested in shares of a company I've invested with for years. I receive a flat rate. guaranteed interest payment each month on money I loan them (along with other investors) for starting up/growing various business ventures.
Those two strategies alone have guaranteed that I'll never have to punch a time clock ever again.
Point is, there are far easier ways to have a solid, self-controlled income throughout retirement than purchasing an annuity.

 

[nasa1974]

I retired in 2012 and left most of my money in my TSP account. I plan to move all my funds into a standard IRA before I turn 70 so I have better access to my money and a little more flexibility. The other thing, in my opinion, if I have any money left in my account when I pass my beneficiaries will have an easier time dealing with a standard IRA vs. TSP.

 

[uscfanhawaii]

I don't see any advantages in annuitizing my tsp when I can set RMD payments on a monthly basis and avoid the high annuity fees. Am I missing something?

No, you are not missing anything. Most retirees do not choose annuity for the reason you mention.

On the other hand, most retirees do not choose periodic (or RMD) payments from TSP either. (There...you got me started on TSP withdrawals again!) Most retirees transfer OUT of TSP and into IRAs, which have much better withdrawal options. See other recent posts on the withdrawal issues.

 

[DaddyTin]

I am looking at taking a 403(b) annuity and convert it to a TSP max input before I stop my civilian work. Taking a lump sum might crack open the flood gates for taxation of my annual income, but if I maximize my TSP contributions over the amount I get from my annuity could offset that flood.

Once you set payments in an annuity, the robust lady sings. With the TSP, the payments can change, correct? Like in case you need ALL OF IT??

 

[nnuut]

All of the information I had at retirement told me to avoid annuities at all costs. NO WAY!

 

[evilanne]

I don't see any advantages in annuitizing my tsp when I can set RMD payments on a monthly basis and avoid the high annuity fees. Am I missing something?

I don't think annuities through TSP is a good idea due to low interest rates. In the long run, you are better off keeping funds in TSP with a moderate rate of return IMO.

 

[JMAN1]

I don't see any advantages in annuitizing my tsp when I can set RMD payments on a monthly basis and avoid the high annuity fees. Am I missing something?