No. of Recommendations: 1
I'm looking at bailing from federal employment and trying to figure out how best to use my TSP.

I'm a strong believer that future tax rates will dwarf current ones and so think it's best to cash out. But, I'll only be 48 when I pull the plug and would incur a 10% penalty for cashing out -- unless I do so via an annuity – or a withdrawal plan based upon life expectancy.

I cringe at the word annuity. But I cringe worse at a 10% penalty.

The balance I'm projecting is about 250k and the annuity payout w/100% survivorship (wife's 47) is $1240 -- $1376 for no survivorship. I found the posts from a few months back on the hedge of life insurance vice survivorship very interesting/helpful…. haven't cranked thru the numbers on this aspect yet…still trying to think of an annuity as something other that a ripoff…

Has anyone out there looked at this trade-off (10% penalty vice annuity) and made any choices or recommendation that they'd care to share? – thanks, Tom
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