My DW worked at an international financial institution overseas for a number of years. In addition to her pension, she was eligible to put a portion of her salary aside as "supplemental retirement savings." Up to age 60, these funds earn a guaranteed 8% a year. When she turns 60, she has the option of taking these funds as a lump sum or as an "annuity." (She could also leave as savings, but only earning 3%/year, which seems less desirable).
The lump sum would be about $500,000
The annuity would begin at around $40,000 a year, but would be fully indexed for inflation with a guaranteed minimum increase of 3%/year even if there is no inflation. While there would be no specific survivors benefit, there would also be a guaranteed minimum 10 year payout (to me, if my wife (who's about 10 year younger) predeceased me).
Sounds like a no-brainer (the annuity must be subsidized by the institution), but perhaps I'm missing something. Anyone have any thoughts?
The lump sum would be about $500,000
The annuity would begin at around $40,000 a year, but would be fully indexed for inflation with a guaranteed minimum increase of 3%/year even if there is no inflation. While there would be no specific survivors benefit, there would also be a guaranteed minimum 10 year payout (to me, if my wife (who's about 10 year younger) predeceased me).
Sounds like a no-brainer (the annuity must be subsidized by the institution), but perhaps I'm missing something. Anyone have any thoughts?