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Lump sum to forfiet pension?

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Money Talk > Retirement Planning

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Jeb G
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Lump sum to forfiet pension?  Reply with quote  

Hi all, great site.
I'm mid 50's and plan to retire at 62. I just rcvd an offer from a former employer regarding my small pension. I'm torn as to what choices to make.

Option1) Take a $21,000 lump now. I'd roll it into my IRA and perhaps earn dividends of $75 (on average) per month?? (Main, PFF, and stag? for you investors)

Option 2) Stay the course and collect $222.00 monthly for life at age 65. This firm amount will not be adjusted for inflation.

Option 3) start collecting $117.00 a month for life right now. I guess I'd be ahead of the $222 option if I pass before age 77+/-. I'm still working and make about $78,000 now.

Unknowns of course: inflation, stock returns, and when I'll pass. Family history suggests I'll go in my mid to late 70's

Thanks Very Much,
Jeb
Post Thu Aug 04, 2016 7:27 pm
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oldguy
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quote:
Option1) Take a $21,000 lump now. I'd roll it into my IRA and perhaps earn dividends of $75 (on average) per month?? (Main, PFF, and stag? for you investors)


I'd probably do a tax-free roll into the IRA. The goal would be to approximately double it in the 7 or 8 years to retirement. (Rule of 72) That gives you a better starting point ($42,000) than either of the annuities (when you add in the time-value of money).

Are you stag-day-trading inside the IRA? Or is the IRA money invested in a fund?
Post Thu Aug 04, 2016 9:09 pm
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Jeb G
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Cash: $ 1.30

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Joined: 04 Aug 2016
Location: RI
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Thanks Oldguy for the reply. I've often mentioned the time value of money, but I drew a blank on that this time.

I've held STAG in my IRA for about 1 and a half years. I TRY to buy individual dividend stocks I can hold long term. I do have a few Index and managed funds. As far as value some do better than I do, some do worse.
Post Fri Aug 05, 2016 2:17 am
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