Results 1 to 10 of 12

Threaded View

  1. #2
    Join Date
    Feb 2008
    Posts
    1,179

    Default Re: Pension vs Lump Sum - Which One to Take if I Am Not Retired Yet

    I'd take the package to a financial and tax advisor. Some pensions in option #1 offer a joint/survivor where it would pay your beneficiary a pension for their lifetime also. I'd look for that if you have a spouse to consider. And are you sure the monthly payment starts immediately or at some early or regular retirement date (i.e. you might be overstating the length of time in #1)?

    #1 is irrespective of the market return vs #2 you are taking more financial risk
    #1 is assuming you will live 45 years to 85....which may or may not happen
    Generally in #1 the employer/plan will continue to pay the funds expenses and #2 the expenses will come out of your investment rate of return or other bank/mutual fund fees.
    #2 assumes that you won't touch the IRA for other reasons over those 45 years (and in #1 you can't do that)....are you one that would use this money for things other than actual retirement (and IRAs don't have too many holds on them other than the 10% early withdrawal penalty and tax consequences)

    There are pros and cons to either way. I wouldnt' take advice from strangers on the internet. Did the former employer offer any help line to call to discuss?

    (I will say I chose #2 when offered, but my lifetime payment at retirement was small AND the amount given was small...I'd only worked there 7 years in the first 7 years of my career - at an HR consulting firm working in pension/401k administration--- so my average wages were pretty low..... yours is a larger amount hence the reason I say you seek advice from someone who is knowledgable and can read the 20 page document)

    1. Sponsored Links
       

Similar Threads

  1. Estate Planning Issues: How to Get Copies of a Trust and Will from a Lawyer Who Has Retired
    By Iron Butterfly in forum Estate Planning, Administration and Probate
    Replies: 1
    Last Post: 07-31-2015, 07:48 PM
  2. Military Benefits: Can You Get a Lump Sum Payout of a Military Pension
    By browneyes in forum Military Law
    Replies: 13
    Last Post: 11-08-2013, 09:21 AM
  3. Federal Taxes: Lump-Sum Pension Overpayment
    By macken439 in forum Tax Law
    Replies: 1
    Last Post: 12-17-2010, 08:01 PM
  4. Collective Bargaining: Recovering Pension Money Paid In if Pension Doesn't Vest
    By Road Kill in forum Employment and Labor
    Replies: 3
    Last Post: 05-05-2009, 09:27 PM
 
 
Sponsored Links

Legal Help, Information and Resources