CRLLS
Thinks s/he gets paid by the post
Hi all,
I have two options:
1. Lump sum: $380,000
2. Joint survivor monthly pension: $1,750 for my life time / $1,100 for my spouse when I pass away
The pay out or pension will start next year.
I am inclined to choose a lump sum payment. Based on family history, 80 years old is probably the realistic estimate of my life time.
I understand the overall financial plan for retirement must be planned including all assets. However, I want to limit the discussion on these two options assuming I will have enough money for retirement. I don’t plan to retire next year.
I did simple calculation:
Every year I take out $21,000 (12*$1,750) and invest the rest of the money with 3.5 % return, I will have get 24 years.
First year: take out $21,000 and invest $329,000 ($380,000 - $21,000)
Second year: take out $21,000 and invest $319,515 ($329,900(1+ 3.5%)-$21,000)
I will be 57 years old next year. So, with only 3.5% return the lump sum payout will last until I am 81 years old.
Can someone please comment on this calculation?
Did I miss anything?
Thanks in advance.
When I run a quick calculation, you will run out of $ in 26-27 years.
Looking at immediateannuities.com you can get a joint 100% life policy at 1875/mo. Seems like a better plan IMO.
Using the trinity study, a 30 year outlook would yield 1267/mo but in year 12(assuming 3% COL raise), it would equal your base 1750/mo and increase annually from there.
So many ways to look at it, depending on those things you don't want to discuss in this thread.