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07-01-2015, 08:36 AM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by robertf57
Thanks, but not really helpful. He is already receiving a life annuity.
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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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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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07-01-2015, 09:18 AM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2011
Posts: 8,362
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Quote:
Originally Posted by big-papa
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.
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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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Living well is the best revenge!
Retired @ 52 in 2005
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07-01-2015, 10:14 AM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Apr 2003
Location: Hooverville
Posts: 22,983
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Quote:
Originally Posted by trapperjohn
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.
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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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"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
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07-01-2015, 10:58 AM
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#24
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Recycles dryer sheets
Join Date: Jun 2014
Posts: 337
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Quote:
Originally Posted by trapperjohn
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.
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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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07-02-2015, 06:28 AM
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#25
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Recycles dryer sheets
Join Date: Jun 2012
Posts: 87
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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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07-09-2015, 01:48 PM
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#26
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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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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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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07-09-2015, 03:57 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,264
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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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If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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07-09-2015, 04:34 PM
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#28
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Posts: 3,054
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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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07-09-2015, 10:46 PM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,264
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We're the government and we're here to protect you.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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07-10-2015, 02:45 AM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,794
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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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Anything which can be used can be misused. Anything which can be misused will be.
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07-10-2015, 07:48 AM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
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Quote:
Originally Posted by jim584672
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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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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You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
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