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Old 07-01-2015, 09:36 AM   #21
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Thanks, but not really helpful. He is already receiving a life annuity.
one other thing - we don't know if it is a life annuity, it could be a 50, 75 or 100% joint and survivor annuity. To take a lump sum the spouse he/she was married to at the original annuity starting date will have to reject a 50% J&S benefit at the new annuity starting date.


of course all this good stuff should be in the election packet, including the relative value of the ls vs the annuity options
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Old 07-01-2015, 10:18 AM   #22
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My wife had a similar thing. After doing the analysis, we ultimately decided to roll it over into her rollover IRA. I think in the long run we can do better, but more importantly, it is now under our control and we no longer have to wonder if some years down the road, the pension plan would find itself in trouble.
DW just had that option and took the rollover as well. The paperwork, rigmarole, hassle and PITA required by the pension administrator only confirmed that moving the $$ was a wise choice.

At least 5, 10 or 15 years from now we know who has the money (DW), where it is (TRPrice) and, with a few clicks can access it. As you note, with all the churn these outfits go through nowadays, even finding where that $$ is could be a pain down the road.
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Old 07-01-2015, 11:14 AM   #23
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But as near as I can tell, if I add what I consider to be a conservative estimate of the lump-sum amount to my existing tIRA balance, and remove my monthly pension payments, at age 100, I will end up with considerably more in my savings than if I just keep getting my pension.
Cool! On your 100th birthday you could go kitesurfing with a naked woman on your back Google how Richard Branson does it for pointers, and then try to remember.

Ha.
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Old 07-01-2015, 11:58 AM   #24
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But as near as I can tell, if I add what I consider to be a conservative estimate of the lump-sum amount to my existing tIRA balance, and remove my monthly pension payments, at age 100, I will end up with considerably more in my savings than if I just keep getting my pension.
How each person assess the utility of their balance sheet and their cash flows is an individual determination. As Ha is humorously implying above, many don't see a balance in the bank at age 100 as particularly valuable.

For me, my major consideration is the money I can spend-- not the money that remains at my death or when I as unable to enjoy the benefits of the cash. A defined benefit plan or other annuity allows you to not have to be concerned with the risk that you will live a long life and for a given return maximizes the potential spend. Could you end up with more in the rolled over account? Of course. BUt, you could also end up with less. And even if you end up with more were you able to spend more during your retirement? This is why I am glad that I have some funds that will come to me from a generous defined benefit plan. I certainly am glad it is not all of my assets; but, I agree with many financial gurus that having some floor of income that is annuitized is a good thing for most circumstances. Perhaps your SS is enough....

It is a more complicated decision than the expected value of the asset.
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Old 07-02-2015, 07:28 AM   #25
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Thanks to all who have responded so far, and to those who will respond.

In an effort to avoid letting this thread go down a rabbit hole, I just wanted to explain my comment about calculating my account balance out to age 100.
I didn't extend the Calc out to age 100 to somehow plan for passing on my wealth to family or charities. Rather, the spreadsheet had to stop extending the calculation at some pount. Age 100 simply seemed like a nice round number.

The emphasis of my question was to ask for collective thoughts and wisdom on which way to go ... not on how much money I'd make.

Again, thanks for all of your thoughts.

Sent from my SM-G900T using Early Retirement Forum mobile app
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Old 07-09-2015, 02:48 PM   #26
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this just came out today - your situation may be grandfathered, however (see page 3)


"The regulations, as amended, will provide that qualified defined benefit plans generally are not permitted to replace any joint and survivor, single life, or other annuity currently being paid with a lump sum payment or other accelerated form of distribution."



http://www.irs.gov/pub/irs-drop/n-15-49.pdf
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Old 07-09-2015, 04:57 PM   #27
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Seems a bit nanny state to me.

I can see some unintended consequences such as a retiree currently receiving benefits whose health has declined unexpectedly and wants to take the lump sum to enjoy their remaining time on this earth would no longer have that option.

OTOH, there are a lot of stupid people out there who would be tempted by the lump sum even when an objective analysis would suggest that the lump sum is unfairly low.
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Old 07-09-2015, 05:34 PM   #28
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The new regs are saying once an annuity has begun the company can't lump sum and end the payments mid stream?
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Old 07-09-2015, 11:46 PM   #29
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Old 07-10-2015, 03:45 AM   #30
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till

My Megacorp never offered a lump sump - only the annuity option. I was sort of glad as it was one less decision to make at a critical time. Running what ever numbers TrapperJohn receives from his company may make it possible to decide which is the best way to go. However, no one can predict the future.

As I look at my pension, I see it as a "rock steady" source of monthly income - not too big, but rock steady. It's small enough that were my Megacorp to ever try to walk away from it, I should be covered by the Pension Guarantee fund (or whatever it is called.)

Another way to look at a pension is that it can free one to be a bit more aggressive with other investments. If that helps to make the numbers come out (in the long run) I see the pension as a good way to go.

My bias would be to take the pension and not the lump sum. Without the numbers, that might be fool hardy. Still the fact of a known amount of money coming in every month is very soothing to me personally. As always, YMMV
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Old 07-10-2015, 08:48 AM   #31
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The new regs are saying once an annuity has begun the company can't lump sum and end the payments mid stream?
They never could in the private sector. It's always elective. But yes, generally the new 401(a)(9) regs will be modified so that once the annuity starts, that's it.
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