Dan and Katelyn break down how a TSP life annuity works—including payout options, permanence, and who it may fit best—while comparing guaranteed income to alternatives like monthly TSP withdrawals and delaying Social Security. They also explain how TSP Lifecycle (L) Funds are structured, how the glide path shifts allocations over time, and the tradeoffs between professional management and personal control so federal employees can better balance certainty, flexibility, and long-term growth in retirement.
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Dan explains how a TSP life annuity works, including when it can be purchased, the payout options available, and why the decision is permanent. He breaks down who this strategy may fit, the tradeoffs between guaranteed income and flexibility, and how interest rates and inflation impact payments. The episode also compares annuities to alternatives like monthly TSP withdrawals and delaying Social Security, helping federal retirees weigh certainty against control in their retirement plan.
Katelyn explains how TSP Lifecycle (L) Funds work, including how they’re built from the core TSP funds and automatically adjust over time through a glide path toward more conservative allocations. She covers the key advantages — professional management, low fees, and automatic rebalancing — along with the tradeoffs, like reduced control and potentially limited growth near retirement. The episode also highlights how to choose the right L Fund and when additional customization may be worth considering.
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