Pension lump sum or monthly
I'm 66 yrs old and in good health. how do u decide if it s better to take pension as lump sum or monthly annuity? I'm eligible for social security as well and have money in 403 b plan and some savings in Stock investments. Investor lean toward lump sum that may benefit them. Any criteria?
Terry Says
OK, you need a trusted advisor. If you take a "lump sum distribution" and do not roll your 403(b) plan into an IRA rollover, you will have to pay taxes on the entire amount, severely limiting your future ability to grow your money! Now, if you do roll your money into an IRA, you will have to make investment decisions about how to invest, how much to withdraw, so you don't run out of money before you run out of time! That's the attraction of taking an immediate annuity -- which promises you a fixed lifetime payment. BUT that payment has two drawbacks. First, if you die in a short period of time, your heirs won't get the balance as they would if they were beneficiaries of your IRA. And if you do live a long time, the other drawback is that you are receiving a FIXED payment, which likely won't keep up with inflation. So a $3,000 a month check might look great today, but at only 3% annual inflation its buying power would be cut in half in 25 years! To find out what you could get if you purchase a fixed annuity now, depending on our age and gender (or over two lives if you are married), and state of residence, go to www.immediateannuities.com. The best answer might be a compromise -- roll over a roll over your 403(b) plan and use a portion to purchase an immediate annuity, while investing the balance conservatively. DO NOT fall into the clutches of a "financial planner" who wants to sell you a "deferred annuity" at a big commission. That is something you definitely don't need! To buy that immediate annuity, I recommend you contact StantheAnnuityMan.com.
