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Old 09-20-2016, 10:20 PM   #21
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Originally Posted by laurence View Post
What do you think the inflection point is? My pension is small but larger than this, I'm taking the about $1000/month at age 55 until I take social security, no COLA, option - work froze the plans a couple years ago, I'm 42 now. I chose this because it felt nice to pad the income until social security kicks in and reduce the withdrawal amount on my portfolio by about 10% for those seven years.

I really do not know... it is different for different people... I just think size does make a difference in the decision making...

I do not think $1,000 a month is a small pension... not big either mind you...

My mom has a pension (from my dad) that is $109 per month... it started 40+ years ago at $45 per month... she was lucky as they would make increases along the way, but usually had a $5 per month minimum... so it kept going up... I think this is small and would have recommended her take a lump sum (but, who knows for sure as the lump sum might have been much worse back then)...

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Old 09-21-2016, 05:19 AM   #22
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The pension is far better than a commercial annuity (6.3% payout). Assuming an average lifespan the OP would have to average 5.6% annual interest on the lump sum to match the pension. So I'd probably go with the pension and just treat it as some nice fixed income.

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