ChicagoGal
Recycles dryer sheets
- Joined
- Apr 21, 2014
- Messages
- 159
I have to make a decision on Friday for my pension benefit. I have two choices:
Lump sum: $852K
Single life annuity: $3,797/month ($45.6K/annual)
Immediateannuities.com estimates a $3,385/month payout for that lump sum, which indicates that the annuity is a better choice, financially.
I'm 58 now, and for the sake of modeling, planning to age 100. No spouse, no kids. It does concern me that the non-COLA annuity will be worth significantly less in 40 years. On the other hand, having some level of guaranteed income now is a hedge against SORR. The pension is about 30% of my total retirement savings. I'm not planning to take social security until at least 67 and probably 70.
The financial planner I used recommended the lump sum in order to do more Roth conversions pre-SS. But then again, she was using 5.95% estimated portfolio returns, which seems high to me in this environment.
What other considerations would you look at in making this decision?
Lump sum: $852K
Single life annuity: $3,797/month ($45.6K/annual)
Immediateannuities.com estimates a $3,385/month payout for that lump sum, which indicates that the annuity is a better choice, financially.
I'm 58 now, and for the sake of modeling, planning to age 100. No spouse, no kids. It does concern me that the non-COLA annuity will be worth significantly less in 40 years. On the other hand, having some level of guaranteed income now is a hedge against SORR. The pension is about 30% of my total retirement savings. I'm not planning to take social security until at least 67 and probably 70.
The financial planner I used recommended the lump sum in order to do more Roth conversions pre-SS. But then again, she was using 5.95% estimated portfolio returns, which seems high to me in this environment.
What other considerations would you look at in making this decision?