I have a friend who needs some direction in planning his retirement and thought the folks here might be of some help. Here's his basic situation:
He will be 64 in June, his wife just turned 59. He will likely retire within the next two years. She will likely retire in 1 to 3 years. He is a govt empoyee with a FERS pension, social security, TSP savings, and a tax deferred account of some sort from a high fee insurance company. She will have social security and has a TIAA-CREF 401(a) savings and a smaller 403(b) account with some rinky-dink company.
His FERS pension and SS will likely fund the bulk of their bills and living expenses, but they will require some other monthly income to fund the remainder of the monthly budget (i.e living expenses and normal spending money). They would also like to maintain access to the "excess funds" for one time large purchases (i.e. a classic sports car, etc.).
Neither of them are comfortable with a do-it-yourself type retirement portfolio. They'd like to have a plan so that they are more or less on autopilot unless they want to pull some funds for a larger unplanned expense. Our employer brought in a consultant who is an expert in govt retirements. They had an individual consultation with this guy who recommended that they basically do in-service withdrawals of all their retirement savings into one account at Mass Mutual and buy a variable annuity. I don't know much about variable annuities, but my gut reaction to this was that it was a terrible idea. However, considering that they have eight million options, what would you folks suggest?
Let's assume that the FERS pension and SS are taken immediately upon retirement (in her case when she hits 62). What's the best course of action? If they roll all of their other money into Vanguard or Fidelity, will those componies help them set up their account so that they can get a guaranteed income stream with part of the funds and an appropriate allocation with rest? Any other thoughts or ideas?
Thanks!
He will be 64 in June, his wife just turned 59. He will likely retire within the next two years. She will likely retire in 1 to 3 years. He is a govt empoyee with a FERS pension, social security, TSP savings, and a tax deferred account of some sort from a high fee insurance company. She will have social security and has a TIAA-CREF 401(a) savings and a smaller 403(b) account with some rinky-dink company.
His FERS pension and SS will likely fund the bulk of their bills and living expenses, but they will require some other monthly income to fund the remainder of the monthly budget (i.e living expenses and normal spending money). They would also like to maintain access to the "excess funds" for one time large purchases (i.e. a classic sports car, etc.).
Neither of them are comfortable with a do-it-yourself type retirement portfolio. They'd like to have a plan so that they are more or less on autopilot unless they want to pull some funds for a larger unplanned expense. Our employer brought in a consultant who is an expert in govt retirements. They had an individual consultation with this guy who recommended that they basically do in-service withdrawals of all their retirement savings into one account at Mass Mutual and buy a variable annuity. I don't know much about variable annuities, but my gut reaction to this was that it was a terrible idea. However, considering that they have eight million options, what would you folks suggest?
Let's assume that the FERS pension and SS are taken immediately upon retirement (in her case when she hits 62). What's the best course of action? If they roll all of their other money into Vanguard or Fidelity, will those componies help them set up their account so that they can get a guaranteed income stream with part of the funds and an appropriate allocation with rest? Any other thoughts or ideas?
Thanks!