chinaco
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
- Joined
- Feb 14, 2007
- Messages
- 5,072
This is a hypothetical question, but in my personal retirement decision I took the lump sum. I did all the math, which showed the lump sum to be the better choice, based on 2006 assumptions. I wouldn't be making the same assumptions these days, being older and sadly wiser. Luckily when I rolled the lump sum into an IRA I left it in cash (procrastination, not planning), so it's still got it's full value despite the crash. Probably breaking about even now after the recent rise in the market.
But still, the overriding deciding factor was that I was 50, and hopefully had a 40 year life expectancy (I guess I still tend to optimism ). I just didn't think that my megacorp would still be around to make the payments. I might be overly cynical on that part, but management was making so many dumb decisions that it tipped my decision toward the lump sum. My megacorp would be considered one of the biggest and safest out there, but 40 years is beyond my acceptable risk level. I have trust issues, and would rather blame myself for any mistakes than curse the darkness.
Taking a lump sum is not necessarily a bad decision.... it could be the best decision for certain people and certain situations.
I got on the soap box because I didn't want people who read this thread to automatically jump to the conclusion that a pension payout (annuity income) is bad deal.