Ask Terry Questions Pension and Retirement

Pension and Retirement

By Terry Savage on May 13, 2013 | Financial Planning / Retirement

I just qualified (age 55) for pension payouts from my former company but am working and making good money (don’t need the pension money). My JP Morgan financial planner says I should cash out and let him invest; my CPA says I should just leave it alone until necessary (age 62 or 65) when I hope to retire (and monthly pension payment increases). I am leaning towards taking the payments now and paying down my mortgage (owe $250K) every month. Would love your opinion? I am a big fan! David

SAVAGE SAYS: Gosh, this is a tough one. Big question:? Is this a pension, or a 40l(k) plan And do you have an option of “rolling out” of the entire lump sum, into an IRA — or is the only choice to take a monthly payment (Your question implies that you have a choice, but I want to be sure.)? And finally, is there any benefit to leaving it with your former employer — for example, is the benefit still “growing,” or is it fixed whether you take it now or in the future If it is still growing, what is the implied “rate of return” you get by leaving it there? I need a bit more info to give you some thoughts on this.

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