Q. I have 25 years in civil service. I have a Thrift Savings Plan account and, once I retire, do I get an annuity automatically or do I have to use the money in the TSP account to get that? Should I buy an annuity or just take a monthly payment from the TSP account? Not sure if I will have enough to retire. I heard that in FERS, the government gives an annuity and then you get TSP. But when I go to the website to estimate how much I have in the TSP, I do not see the FERS annuity they talk about and see only one amount.
A. Reg Jones says: Assuming that you are eligible to retire, your FERS annuity would be calculated as follows: 0.01 x your highest three consecutive years of average salary (your high-3) x your years and full months of service. FERS employees can retire at their minimum retirement age with 30 years of service, 60 with 20 or 62 with five. They can also retire at their MRA with at least 10 but fewer than 30 years of service; however, if they do, their annuities will be reduced by 5 percent for every year they are under age 62.
Mike Miles says: You may use all or part of your TSP account funds to purchase an annuity from any source you choose. The TSP offers an annuity underwritten by MetLife, but you may also roll over TSP funds to an Individual Retirement Account and use those funds to buy an annuity from any insurer you choose.
