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Old 11-17-2018, 12:45 PM
Status: "Re-edit status" (set 16 days ago)
 
Location: Was Midvalley Oregon; Now Eastside Seattle area
4,168 posts, read 1,892,872 times
Reputation: 3195

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OP; Suggest that whatever you chose, that you do some laddering: Either or both time and amounts.

in late 2008, we did laddering of GLWB annuities of our IRA's and rollover 401k , at 58/61. Some of the annuities are coming out of guarantee in 2018 (68/71) and we rolled some to new GLWB annuities with better terms that fit our requirements. We had one just come out in early Nov and will have another in late Dec. We are not sure what we will do and all choices and alternatives are on the table. Our financial situation has changed from precarious in 2008 to secure in 2018 and reasonably certain that we will be OK for the remainder of our lifetimes. Inflation included.
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Old 11-17-2018, 01:04 PM
 
3,290 posts, read 847,864 times
Reputation: 3784
Quote:
Originally Posted by elchevere View Post
Greetings:

I am leaning towards taking the monthly single annuity payout for the rest of my life, rather than the lump sum, as I am single with no heirs.

The current annual payout, taking the monthly payout option, from the firm managing my company's pension fund equates to 6.2% (annual income divided by lump sum payout).

I ran the 6.2% figure past one of my financial advisors who said that is a good return.

Is that a fair percentage return?....can I get a better rate of return on my lump sum from a different, reputable company without significantly increasing my risk (recognizing I am covered up to $60K annually by PBIC)?....not looking to invest the money in the stock market--looking for my pension to generate a steady and consistent stream of income for the rest of my life.

I am not planning to take my pension income until January 2020 so I have plenty of time to shop around and consider my options.

Thanks
In nearly every case, the payout is a pittance compared to the sum of payments extended over the remainder of one's life. If you live a long life, you win. If you don't, then, well, you won't have to worry about it!

Most corps want you to take the lump sum so you're off their books. I say screw 'em!
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Old 11-17-2018, 02:58 PM
 
Location: Central New Jersey
2,384 posts, read 910,301 times
Reputation: 4219
Know several people that had a choice for lump sum or monthly and many of the lump sum people say they regret it. Ton of money at one time too tempting to splurge on items really not necessary.
Good luck
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Old 11-17-2018, 04:12 PM
 
Location: Ypsilanti, MI
2,439 posts, read 3,661,951 times
Reputation: 4790
Quote:
Originally Posted by joee5 View Post
Know several people that had a choice for lump sum or monthly and many of the lump sum people say they regret it. Ton of money at one time too tempting to splurge on items really not necessary.
Good luck
I can easily see this happening. A person needs a good plan to make the lump sum funds provide income for life, or a trusted advisor to develop a plan for them.
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Old 11-17-2018, 04:56 PM
 
3,290 posts, read 847,864 times
Reputation: 3784
Quote:
Originally Posted by joee5 View Post
Know several people that had a choice for lump sum or monthly and many of the lump sum people say they regret it. Ton of money at one time too tempting to splurge on items really not necessary.
Good luck
I look at it like this - if you draw up the numbers and your budget doesn't work out with the monthly payments, it will be twice as bad taking a lump sum!
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Old 11-17-2018, 10:21 PM
 
2,575 posts, read 4,689,485 times
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I took the lump sum because my mother and both grandmothers died at 35, 58, and 60 years of age. When I turned 60 my former employer told me I wouldn't receive a higher monthly or lump sum payment by waiting, so I took it right away.

I've been investing since I graduated from college and am very good at managing my finances and spending (which allowed me to retire early), so with that and the longevity question, it made sense to take the lump sum. I do have a child so I have someone to leave it to if I "check out" before I spend it down.

Of course, I rolled it over into a traditional IRA so as to avoid tax on the entire amount at once.
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Old 11-18-2018, 01:04 AM
STH
 
12 posts, read 9,754 times
Reputation: 30
My company offers a lump sum or an Annuity. The annuity works out to 6.3%, since the wife and I don’t have children or others we want to leave money to. We will take the annuity and let the other investments (401k, investment account, savings accounts, and land) be our emergency/cost of living adjustment funds.
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Old 11-23-2018, 02:23 PM
 
Location: Greenville, SC
4,640 posts, read 3,699,524 times
Reputation: 8618
Quote:
Originally Posted by reed303 View Post
2. If on Medicare, your Part B premium may increase due to IRMAA
I just received a letter from the SSA - I'm getting nailed by this. I took a 401K distribution in October 2017 to pay off all debts and put the rest in savings, planning to use it for a condo down payment. I started Medicare Part B on November 1, 2017. As a consequence, my income for 2017 was high - and my Medicare Part B will be $300 more during 2019. Granted, it will go down for 2020, but still - that's $300 a month I wasn't planning on. So BE CAREFUL of this, folks.
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Old 11-23-2018, 07:31 PM
 
Location: Grove City, Ohio
10,133 posts, read 12,381,010 times
Reputation: 13956
Quote:
Originally Posted by katharsis View Post
This, of course, is just my very personal opinion based on a very small pension. I also collect social security and still work an average of about 12 hours a week by choice.

Three years ago, when I was 62, I had the choice of taking the lump sum of about $20,000 or a monthly amount of $101. I chose the monthly amount because I knew that the lump sum would be just lumped in (literally) with the rest of our savings and because my recent ancestors were very long-lived. Anyway, I know that might not have been the wisest financial decision, but I am nevertheless happy with it. We keep a separate account for my pension, my part-time job earnings, and any other miscellaneous checks that come in (like rebates) and it is amazing how quickly that account has grown in three years! We have not withdrawn from it in three years since we opened it, but the money is there and very easily obtainable without penalty if we ever do need it or want to splurge,
It was 8 years ago my wife had the option of taking a cash payout from her state pension of somewhere around $9,000 or $275/month for as long as either of us lived. The $275 was for survivor so if something happens to her I end up with her pension.

We didn't take the money and it eight years we already got $26k back so we already got our money.

$275 isn't much but it is enough to pay all our utilities in our condo.... it's a lot after all.

The biggest thing about the wife's retirement isn't the $275 but here medical reimbursements... every month they totally reimburse her for her Medicare Part B payment along with her plan G and Plan D premium and she receives around $2,000/year in her medical savings account which means her medical costs are absolutely zero. The medical is worth more than what she gets in the pension payment.
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