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Old 11-09-2016, 03:31 PM
 
Location: S.W. Florida
2,213 posts, read 935,111 times
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I took the lump sum for several reasons. My financial advisor was able to show me that it was basically a wash between the lump sum and the annuity the company offered. I liked the fact that I was in control of the money and invested it in such a way that it will provide a very nice income for the rest of my life. Another factor was that I do not have the longevity gene so I wanted to be able to pass the money on to my heirs vs the company keeping it.
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Old 11-09-2016, 07:10 PM
 
Location: North West Arkansas (zone 6b)
2,673 posts, read 2,015,939 times
Reputation: 3671
my wife just went through this. I took my early pension because I had no trust that my old company would be around much longer. I did not want her to take an early distribution because her pension is with a large deep pocket lots of cash corporation.

She analyzed it for a few weeks and ultimately came to the conclusion that they were trying to rip her off so she decided to ignore the reminders that started coming once a week until the deadline passed. It really did seem like they were getting desparate to pay out some early distributions.
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Old 11-09-2016, 08:35 PM
 
3,460 posts, read 2,202,288 times
Reputation: 6131
Quote:
Originally Posted by gunslinger256 View Post
my wife just went through this. I took my early pension because I had no trust that my old company would be around much longer. I did not want her to take an early distribution because her pension is with a large deep pocket lots of cash corporation.

She analyzed it for a few weeks and ultimately came to the conclusion that they were trying to rip her off so she decided to ignore the reminders that started coming once a week until the deadline passed. It really did seem like they were getting desparate to pay out some early distributions.
My concern, is that they will come back next year or some time in the future, just before you retire or while retired and force you into taking an option you don't want such as "Here is your lower paying crummy annuity, and since you didn't take the one time offered lump-sum you are stuck with getting 30-40% less in monthly payments".
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Old 11-09-2016, 08:41 PM
 
3,460 posts, read 2,202,288 times
Reputation: 6131
Quote:
Originally Posted by Ron61 View Post
I took the lump sum for several reasons. My financial advisor was able to show me that it was basically a wash between the lump sum and the annuity the company offered. I liked the fact that I was in control of the money and invested it in such a way that it will provide a very nice income for the rest of my life. Another factor was that I do not have the longevity gene so I wanted to be able to pass the money on to my heirs vs the company keeping it.
My had this nonsense in there about limiting your pension if you were also taking social security. With the lump-sum that eliminates that concern.
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Old 11-10-2016, 04:05 AM
 
Location: Ypsilanti, MI
2,448 posts, read 3,668,587 times
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Quote:
Because I was under 59 1/2, I would have had to roll over a lump sum to an IRA to avoid an early penalty and tax. The lump sum offered me was decent but not near what I would have received with a normal life expectancy. I would have had to invest it wisely and safely, but that type of investment would not have yielded me a high enough return to make taking the lump sum worthwhile.
Don't forget to research the 72(t) Rule! That can benefit those retiring prior to 59-1/ by eliminating the 10% penalty on IRA withdrawals if you elect "Substantial and Regular" payments from the account. And the magic age for penalty free withdrawals from a 401(k) Plan is only 55, not 59-1/2! A person may be able to direct their buy-out/Lump Sum as a payment to their 401(k) or 403(b).
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