Pensions buyout?
I have a small pension from Sears and they have offered me a lump sum. I am 62 and planned to start receiving benefits at age 67 because the amount will double. What should I do? I don't think Sears will be around for very long. Thanks Barbara
Terry Says
There is an easy way to find out if they are offering you a reasonable deal. Go to www.immediateannuities.com and enter the dollar amount of the lump sum payout. Then click on the box that says you want the payout to start in 5 years. Then compare that amount to what you expect from the Sears annuity in 5 years. That's how to tell if they are offering you a large enough lump sum to make it a good deal. The real question is whether the terms of the buyout allow you to ROLL OVER the lump sum to a comparable deferred annuity, without paying taxes now be sure to ask how this would be handled. But don't worry about the pension promise. Even if Sears declares bankruptcy, the obligation to pay will be covered by the Pension Benefit Guaranty Corp -- up to roughly $55500/month in 2017.
