Originally Posted by stepford
It'll have to be a pretty generous lump sum for me to bite. The majority of my assets are already in tax deferred accounts and I like the diversification of having an annuity component in my income stream - albeit a minor one as my pension from Megacorp is about 20% of my NW (if I use the value of an equivalent annuity from immediateannuities.com).
Now if, miraculously, Megacorp offers a buyout price that's significantly greater than the value I've calculated then I'd have to consider it, but I'm not holding my breath.
My number is about 35% of NW but yea I've done the math too with immediate annuity methodology. Great way to look at it. "How much would I need to put into a lifetime annuity to get the same income stream as my pension will provide..."
There is a story in Money about Megacorps doing this and it said 58% typically take the lump sum. That surprised me it was that high.