How to Choose Between a Lump Sum or Pension
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- Опубліковано 29 лип 2024
- Everything you need to know to choose between taking a lump sum or a pension
Links in this video:
Retirement Planning Insights - www.tenonfinancial.com/newsle...
Taxes in Retirement - / taxesinretirement
#RetirementPlanning #Pension #LumpSum
DISCLAIMER: This video is only helpful hints and education. It is not specific tax, legal or investment advice. Before considering acting on anything you see in this video, first consult with your tax, legal or investment advisor. While the information expressed in this video is believed to be accurate, neither Andy Panko, CFP®, RICP®, EA nor Tenon Financial LLC make any guarantees to its accuracy.
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I took the pension.Am a retired RN who worked 32 yrs at the bedside.
I Love this podcast. My husband and I are having this discussion regarding our pensions. Thank you for sharing
Hey Andy, I love your theme song. Use it on every video. You have been answering a lot of my questions on your videos. Thank you. Keep it up!!
I'm glad you like the videos, thank you! If you haven't noticed, I've been getting a bit lazy with the production of these videos. Now it's basically just sit, record, talk, upload. I stopped doing scripts and screen overlays and the fancy intros and outros. Maybe some day I'll bring that all back...
Professional and well presented with clear explanations
Great video! Nice that it goes way beyond the net present value calculation for deciding between the two.
Thanks Cody! Exactly...many people try to pin down all financial decisions to a pure mathematical answer. But there's always more to consider. Personal finance is more personal than it is finance. And yes, I took that line from Ric Edelman :)
Good advice but i will have to use a crystal ball 😅
You are good! Thanks
My delivery is monotone, dry and unimpressive. But at least the content itself is good...thanks!
I worked for 13 years from 1990 to 2003 , me and my employer were paying into pension,I stopped working at 2003 at age 45 and resided overseas, now I am 62 .. am I entitled to any pension,and if so, what are my options? .. Thank you
You’d have to check with that employer. Presumably you’re eligible to receive the pension. But confirm with them. And they’ll also be able to tell you what your payment options are.
I plan to take pension in retirement to provide stable income source. I am single so only 1 Soc asec check and don't need to leave anything - No heirs.
Hello,
So my dad's company got a "Lump Sum Pension Offer" to their employees because the company about to shut down in 2016. The deadline was Nov. 2016 to submit the forms that they offered.
There were 3 options for him to choose from:
1- Elect to receive a single lump-sum payment
2- elect to start monthly benefit payment
3- wait until later to begin receiving your pension
At that time, he chooses option 3 and does nothing.
Now 2021, he wants to rollover that pension $ to a Roth IRA or take the lump sum. Is it too late for that? If not, where was that pension $ go? because the company he worked not exist anymore so was the phone # for help assistance. Who do I contact to get help with this situation?
Thanks for your help
My parents are both 90 and Healthy! No history of cancer in family. My break even is just over 10 years?
Our pensions and Lump sum have been Frozen for 10 years, will never change or grow? Major Medical Corp w TransAmerica managed retirement funds.
are there any tax considerations to avoid if we do a direct transfer of the lump sum to an IRA?
No, a direct transfer is a non-taxable event. Once in the IRA, then any subsequent distributions from it are taxable just like any other normal IRA distribution would be
What protection is there for my pension that is sold to insurance company? Pbgc doesn’t cover that, right?
Correct, PBGC would no longer cover the pension once it's transferred to an insurance company. At that point, the insurance company's backstop system would come into play in the event the insurer can't meet payments. And insurance backstops are state-by-state; not national. Here's more info:
www.kiplinger.com/retirement/retirement-planning/603375/can-insurers-be-a-pension-safety-net
I can get $1840 pension or $236K Lump Sum? That's barely over 10 yrs?
Not exactly that simple. $1,840/mo is $22,080/yr. So, on the surface, it would look like it takes 10.69 years of payments to hit break even of $236,000. But you have to factor in the "time value of money." In other words, if you received $236k in a lump sum today and just had it all sit in cash and you took out $22,080 per year, yes, it would take 10.69 years until you deplete the $236k. But, you have to keep in mind the $236k can earn interest, be invested, etc. So it should generate some growth as well, as opposed to just sitting in cash. Depending what rate of annual growth you assume, the break even is more like 15-ish years. And that's the kind of analysis the pension plan does when figuring out the payments to make for a given lump sum, or figuring out the lump sum to make for a given amount of payment. They typically assume a life expectancy if early-to-mid 80s, and the assume interest rate varies based on the market, but is probably like 5-6%
Ok, so say it does exactly that, lasts 15 years? Which is Better For Me? I wish it had COLA but it us frozen! So which dobi choose? I also have 400K 403b and will wait until 67-70 to take Soc Sec?
@@josephj7991 Sorry, but it's impossible to say over a public forum which option is better or best for you, as it all depends on your own personal circumstances, risk tolerance, amount of anticipated expenses you'll have throughout retirement, plans and goals for leaving money to people after you leave this world, etc.
If you're looking for assistance in making the decision, perhaps try searching for an hourly financial planner on www.GarrettPlanningNetwork.com. That's a network of "Fee-Only" advisors (i.e. none of them sell any products for commission; they all just offer advice and get paid directly from clients) who all offer services on an hourly basis.
My husband has approximately 50,000 in his pension. He retired the last day in February 2021. I retired last year. I get SS and a pension from my former employer. My husband gets SS now. Our home is paid for. We would like to take the 50,000 and invest somehow (very low risk preferably) and see what we could get monthly from it and be able to will it to our children when we pass. Any help is appreciated.
Hard to avoid the impression that the whole public pension thing isn't going to collapse in the next 10-15 years. Between woke incompetence hiring policies and political corruption, someone is either going to figure out how to steal pension money, or just lose it through incompetence.