Rollie said:What is everyone's opion on takeing a lump sum vs. pension. My dilema is that a lump sum payout (base on a 30 yr tres. rate of 6%) is $650K...my joint annuity option is $3674/mo. No inflation rider on it. At 4% SWR. my lump sum will deliver $2166/mo. I am currently 52...going for 55 ER. I have other investments...but need about $3500 from my pension benefit. The Mega corp I work for is in a steady industry...been in business 75 years...pension is funded 100%. What do you all think...any options that do not require me working past 55? Thanks for your feedback.
Rollie
Rollie said:Thank you all for the great feedback. My DW does not have a pension plan or profit sharing...she had a full time job raising our kids...now working just part-time. So we are counting on my company pension and profit sharing. I requested a SS estimate with me retiring at 55...the est. is $17800/yr. I am looking at that as hopefully an inflation hedge along with what she will get. She is now 48...and will get at 62 about 33% of my benefit. My profit sharing should be about $500K+...so if I do not take the pension annuity and take the lump sum I would have to work a number of more years. That is not a good alternative. I have only $40K outside of this...as most of my after tax money is and has been going to 529 plans for my kids college. All bills and mortgage will be paid for when I hit 55. Medical is a retiree benefit...Mega Corp contributes 50% of premiums. After 30 yrs with the company I am looking forward to getting off the treadmill.
While I am an infrequent poster...I am an avid reader of the forum...thanks again for all your feedback...more thoughts are always welcome.
Rollie
A FIRECalc run using the numbers: $42,000 annual W/D; 40 yr plan length; your SS of $17,800/yr starting in 2016; wife's SS of $5900/yr starting in 2020; fixed pension of $44,088/yr starting in 2009; $40,000 current portfolio invested at the defaults; starting your retirement in 2009; shows a 70.8% success rate.
This could be improved if you put some more money into your portfolio between now and 2009, reduced your expected retirement expenses or worked longer (either part time or full time).