Only a small number of investors who are willing to use their savings to purchase an annuity actually do so, for reasons such as the difficulty of fully understanding annuities and proceeding with the purchasing process. The investigation revealed that.
Although the study by the Retirement Research Center did not focus on federal thrift savings plans, its findings indicate that TSP investors who purchase an annuity upon separation from federal employment This may shed further light on why the number is so low compared to the plan (it’s only a low single-digit percentage). You receive a lump sum payment on a regular or irregular basis.
The study looked at investors with at least $100,000 in investable assets, which is less than the average TSP account, and found that half were not even considering buying an annuity. Reasons for wanting to keep money under personal control include wanting to leave a lump sum of money as a bequest. Concerns about potentially large future expenses, such as long-term care. And there is pessimism that they will live long enough to make the purchase.
However, of the 50% who said they were interested in purchasing an annuity, only 12% did so, and the remaining 38% did not. In other words, “the desire to purchase an annuity is meaningfully distanced from actually purchasing an annuity,” the study says. .
“In reality, if an individual wants to buy an annuity, he or she knows that such products exist, finds a reliable insurance company, chooses from a number of complex product options and riders, and buys insurance. You need to contact the company and sign a contract. Each of these steps may require several small actions and information. If any of them fails, even if you want to receive a pension in the abstract “This could pose an insurmountable obstacle to receiving a pension, even for those with disabilities,” the report said.
For example, only 40% of over 1,000 respondents answered that they had “some knowledge” about how pensions work. “It has a high level of sexuality.”
COLA will decline in 2024, but remains at a high level in recent years
Social Security and Medicare numbers changing towards 2024
Signed the largest increase order in 40 years.New region takes effect
Yes, I retired. What’s next?
Want to come out of retirement? Return to work in government
What happens after I submit my application for resignation?
The biggest Social Security myths that federal employees fall into
The first year after retirement can be tough.3 things to prepare for
Federal Retirement Red Flags to Avoid
Best Retirement States for Federal Government Retirees
