SPIA - CD Ladders vs Lump Sum Pension
I am new to this forum. I am 49 years old and recently left MegaCorp after 16 years of service. I was fortunate in that the received a substantial bonus payment (40% of my existing amount) to my pension for leaving. This had to with some sort of tax rule and was tied to the current interest rate environment where lower interest rates meant a higher bonus payment. Curious to know if anyone has run across this before?
Next, I looked at the total amount in my pension and then looked at what their offer was as a lifetime payment. They offered both an immediate payment as well as a deferred payment starting when I turned 55.
I don't need the money now and am retiring at 55, so I did consider the deferred amount as a lifetime monthly payment which included joint survivability when I turn 55.
However, in looking at the numbers on immediateannuity.com, the quotes I was seeing for both immediate and deferred annuities were 20% higher than what was being offered by my company.
I decided that I could set up either a SPIA or CD ladder at 55 with 72T payments from my IRA and wind up in better shape than the company pension offer. I will also be consolidating 2 houses into 1 and will take the equity from my primary residence and use that in either a SPIA or CD ladder. I liked having the flexibility in deciding how much of my future value pension could be used.
I hope all of that made sense. My second question is, has anyone else turned down a pre-55 immediate and deferred pension offer in lieu of a self directed SPIA / CD ladder strategy?
One of the reasons I left MegaCorp was because of the 40% bonus payment by the way.
I'm sure many people have talked about this before, looking for some feedback.