[Tianna]

I just received a letter from my previous employer that I can take a cash out of 54k or take my pension in monthly payments of 384.00/ month for life.

The payout would need to go into my IRA. If I die, my hubby would not get the monthly payments.

I never had this option….i thought the monthly payment would only happen at 65 yrs. Not sure what to do, I am 63 years old now.

[Robert]

I look at it this way… As a female, your life expectancy is 88 years of age; with a very good chance you’re gonna make it into your 90s.

One of the posters here has already indicated that the lump sum equals about 11.7 years of the monthly payment.

Given that you could very well be alive for another 25 years…… I would take the monthly payment.

[Ruby]

The lump sum equals about 11.7 years of the monthly payment, so just figure out whether you could invest the lump sum and grow that in a faster way that would increase a payout of more than $384 a month for the rest of your life

[Anca]

Take the lump sum and invest it in better options like mutual funds. Plus, if you die, your beneficiary gets the $$ vs.

then not getting anything from your employer

[Tony]

I would take the monthly payment if you plan to live longer than 12 years and don’t need the lump sum amount right away.

It’s a decent return and the next 4 years are going be rocky to say the least.

[Krystall]

Roll it over so you don’t lose it, and you have control of where it’s invested.

Also, in the event of passing, your beneficiaries get it.

[Rebecca]

Lump sum. You won’t live forever and you won’t live a healthy life for even less of that.

Take it now, pay the tax and either invest it or use it.

[Kayla]

I’m no professional, but personally, I feel like I would cash out. Something could happen to you tomorrow and that money would be forfeited.

If you cashed out, you could let it grow tax free and he’d benefit if anything happened to you

[Russ]

Take the lump sum. If something were to happen to you, that capital is gone. If you were to die, your heirs get nothing.

Although $384 for life is a nice thought, if you don’t make it long, that capital is gone

[Chris]

Please consider your tax situation. There is no state tax on pensions in many states.

If you take the lump you will pay state taxes on distributions.

If your in a state with no state taxes and you are in good health the monthly payment is a no brainer.

[Brian]

Some pension plans allow you to have a 100% or 50% joint annuity. Check with your pension plan provider.

Also don’t IM the folks on here.

[Tristan]

Do the math, but generally the lump sum, rolled to an IRA and invested maths out better. Plus, you aren’t stuck to a fixed payout.

And if you pass your husband inherits it and also isn’t stuck to a fixed payout, so you both could take more or less depending on needs (once you reach 59.5 of course)

[John]

If you invedted the 54 k you coulfld possibly achieve more per month just in earnings and still have the 54k.

[Stacey]

At about 75 you’d have received the equivalent to the lump sum. If you think you’ll live to 80 and beyond. (Likely I hope) Then I’d take the monthly easy-peasy $384 and not be taxed on the lump right now.

[Flo]

There’s a lot to consider. You’d pay income taxes on the $54K, not knowing your situation, does that mess anything up for you currently?

Something else to consider is the market is not stable right now. And likely won’t be for many years based on who’s in office

you don’t want to put it in a HYSA, cause that won’t make as much money as the payout option, but putting it in the market is riskier than usual these days.

At your age, you need to conserve it, not grow it if your retirement is depending on this $54K. You could also always annuities the lump sum later yourself when you’re ready.

An IRA will get you an annuitization, payment amount varying of course… Second, if you’re not ready for the payment, and want to wait 1-2 years, ask them to defer it until later.

The pension is put into an annuity.

You can defer it in one of two ways, defer the annuitization itself (wait to start the payment process) or you can start the annuitization process but defer when you receive the first payment.

Every insurer’s annuity product is different so check with them on your options. Ultimately, no one here knows you or your situation enough to offer sound advice.

Always seek a finpro that has insight to your entire portfolio.

Good luck!

[Yang]

One thing to take into consideration is if there’s a cost-of-living increase.

Years ago, I had the same opportunity with a pension that was about the same amount.

There was no cost-of-living increase, so I took the lump sum and invested it.

[Trina]

I would take the lump sum just to have control over it. All investment options are then available as well as beneficiary choices.

You could split it between safe and more speculative investments.

[Goss]

You have a lot of options, go to an advisor. You have annuity, IRA, and a lot of other options.

Nobody but someone who knows your family’s personal situation can really provide a resolution

[Author]

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