Pension lump sum, take or leave?
My union pension is ready to be drawn down now and they are offering a lump sum of 26K in return for 10% cut to the monthly benefit.
Monthly amount is $1300 approx. I do have another pension $50K annually and SS will be $1200 PM. 401k is $487K.
Mortgages and taxes on 2 homes come to $35K.
Should I take the lump sum?
Thank you Terry, love your advice,
Retired CFD
Terry Says
Is there an option to ROLL that lump sum into an IRA, where it could keep growing tax-deferred?
If no rollover option, you would likely pay taxes immediately on this lump sum, leaving less left to invest– and possibly impacting other benefits such as the cost of Medicare Part B. So this decision has to be made in context of your entire financial situation.
Is it time to find a fee-only FIDUCIARY financial planner you can trust to guide you through this?
Here’s how to start that process: https://www.terrysavage.com/pam-krueger-wealthramp/
And if you are looking to see how much of an income haircut you would take, go to
www.ImmediateAnnuities.com to see what you could get for that lump sum from a highly rated insurance company as monthly income (with or without surviving spouse benefit), based on your age and state of residence. Is that more than the 10% cut they are offering you?
