I'm 54 and will be eligible to retire at 55 next year. 30 years at Megacorp.
- Salary = $140K
- 401K = $500K (I contribute $22K/yr pretax & $15K/yr after-tax)
- $650K house paid off
- Wife is 50, makes $75K & can retire at 55 with $30K/yr COLA'd pension & $200K 401K.
- SS should be worth ~30K/yr at 66.6 and another $15K/yr when wife is 66.6. I'd be happy to get maybe 2/3 that amount.
- 2 teen kids with ~$100K total set aside for college at this point.
- Our current yearly expenses are about $100K (yikes). Hope to get this down to ~$70K or less when the kids are grown & on their own.
My work is pleasant enough and I can save ~50K/year so it's hard to walk away from.
I can take a COLA'd pension of $60K/yr at 55 or $72K/yr at 60.
Or.... I can take a lump sum of $1.7MM at 55. It actually goes down at 60.
I want the lump sum because the current low interest rates make the payout huge.
I figure if rates go up to something more normal I can get an equivalent annuity if I want, with lots of dough left over.
I wouldn't mind working a few more years & saving more money, but I am paranoid about that $1.7MM being snatched from my grasp.
By various accounts I'm out $50-$100K for each quarter percent rates go up.
I am also concerned that the lump sum option will be discontinued in the future.
And I prefer not to be dependent on the financial health of my pension plan for the rest of my life.
Any opinions on whether my concerns are justified? What would you do?
Thanks for reading.
- Salary = $140K
- 401K = $500K (I contribute $22K/yr pretax & $15K/yr after-tax)
- $650K house paid off
- Wife is 50, makes $75K & can retire at 55 with $30K/yr COLA'd pension & $200K 401K.
- SS should be worth ~30K/yr at 66.6 and another $15K/yr when wife is 66.6. I'd be happy to get maybe 2/3 that amount.
- 2 teen kids with ~$100K total set aside for college at this point.
- Our current yearly expenses are about $100K (yikes). Hope to get this down to ~$70K or less when the kids are grown & on their own.
My work is pleasant enough and I can save ~50K/year so it's hard to walk away from.
I can take a COLA'd pension of $60K/yr at 55 or $72K/yr at 60.
Or.... I can take a lump sum of $1.7MM at 55. It actually goes down at 60.
I want the lump sum because the current low interest rates make the payout huge.
I figure if rates go up to something more normal I can get an equivalent annuity if I want, with lots of dough left over.
I wouldn't mind working a few more years & saving more money, but I am paranoid about that $1.7MM being snatched from my grasp.
By various accounts I'm out $50-$100K for each quarter percent rates go up.
I am also concerned that the lump sum option will be discontinued in the future.
And I prefer not to be dependent on the financial health of my pension plan for the rest of my life.
Any opinions on whether my concerns are justified? What would you do?
Thanks for reading.