Retiring very soon.

[swodo]

I have within my Company's weird pension plan two options after retirement.Withdrawals can be made from either:

A fixed return option currently paying 4.8% (has historically been around this percenatge). or

An option which guarantees a payment of the greater of 5% of the fund value determined on an annual date or 5% of the amount on the date I elect this option. Even if the fund value drops to zero I would still receive 5% of the initial amount, An "insurance premium" of .5% applies for this guarantee.

I intend to withdraw at either the 4.8% or 5% each month to pay my 4.5% mortgage for the next 30 years . (Due to taxes paying off the mortgage is not an option.

A third option would be to take the value in cash and put it into a conservative balanced mutual fund (Vanguard Wellesley).

Please share your thoughts.

 

[Katsmeow]

DH recently retired and he took the lump sum in cash. While his employer's plan is well funded you never know what will happen in the future. the Pension Guaranty fund would not pay his full benefit as it was above their max and it would only offer a 50% survivor option. We did put some of it in Wellesley but not all of it.