Did I Make a Mistake With Two Annuities?

Jill on Money with Jill Schlesinger

A retired federal employee, Susan, calls in to discuss her decision to purchase two separate annuities following a retirement seminar. Jill

Key takeaways

• Susan rolled over $250,000 and $100,000 from her Thrift Savings Plan into two separate annuity contracts.
• Jill suggests that because the $350,000 in annuities is fixed, Susan can afford to be much more aggressive with her $100,000 Roth IRA.

Main topics

• Annuities
• TSP Rollovers

Notable quotes

I would never want you to do what you were doing, like for the second tranche.

Conclusion

The episode provides a cautionary lesson on evaluating insurance produ

Transcript preview

Speaker 2 (0:03) Welcome to the Jill on Money Show. It's Tuesday, September 22nd, and we are here answering your financial questions. And that can take the form of lots of different things. It could be about a house. It could be about a job. It could be about retirement. It could be about college planning. Maybe it's about estate planning. Maybe it's about life insurance. Hey! Happy Life Insurance Awareness Month. I knew you had that on your calendar. Whatever's going on in your financial life, we'd love to hear from you. Go to JillOnMoney.com, click the Contact Us button, write us a note. If you'd like to come on the air live, just check the box. Mark will do everything else. Hey, while you're on the website, don't forget to sign up for the free weekly newsletter. That comes out every Friday, and that will also entitle you to our blog. Today, we are going to chat with Susan, who joins us from Illinois. Hello, Susan. Susan, how are you? Good morning. I'm great. Tell us what's going on and how we can help you out. Speaker 3 (0:57) Well, I am a federal employee, or used to be. I retired in 2024. Before I retired, most federal employees are offered a seminar on retirement and what to do with our money. that has been in our TSP accounts. So I went to a seminar. I thought it was put on very well. And they also bring in financial advisors. If you want to partake of their business, then you can do that at the seminar. So I did that. Speaker 2 (1:34) And Speaker 3 (1:35) I went with a local company and they put my money in an annuity. Hold Speaker 2 (1:42) on one second. I just want to make sure I get this. You retire, you go to a seminar, and we are now talking about you had money in the thrift savings plan, right? Yes. Okay. And how much was in there that you rolled over to the IRA rollover account? Speaker 3 (1:57) Okay. So the first rollover was $250,000. Speaker 2 (2:01) Okay. And there's a second one. Speaker 3 (2:04) Second rollover Speaker 2 (2:05) was $100,000. Okay. So that was the money from the thrift savings plan, went to an IRA rollover, and from there you bought an annuity. Did you put it into two different annuities or the same one? Speaker 3 (2:17) Okay. So the first annuity was the 250. Uh-huh. And that's Speaker 2 (2:22) - Speaker 3 (2:22) The Speaker 2 (2:22) second, Speaker 3 (2:22) yeah. Speaker 2 (2:23) But there's two separate contracts is what I'm asking. Speaker 3 (2:26) Yes. Speaker 2 (2:26) Okay. Got it. And are you entitled to a pension? Yes. How much is your pension amount? Speaker 3 (2:33) That- Is roughly $2,300 because I still purchase my health care. Speaker 2 (2:42) Okay. And how old are you, Susan? Speaker 3 (2:45) I will soon be 68. Speaker 2 (2:49) Okay, great. Married, single, partnered? Married. Married. Okay. And how old is your spouse? Younger. How much younger? I can't wait. Tell me more. Tell me more. Speaker 3 (3:03) Uh, we'll just say 10. Speaker 2 (3:07) You'll say 10, which means 15. There's no judgment. Who knows?