# What is the formula?

#### ana.omaly

##### Confused about dryer sheets
Hi All

I am new here. My company has decided to stop payments into our retirement funds effective this September. This fund is an Lifetime Annuity. I am trying to figure out when I should start taking the payments.  I would like to leave corporate America and persue my artwork full time ( I just got gallery representation in Sag Harbor!!!) and use this money to invest rather than for living expenses.

OK so here is my question:

If payments stop in Sept 2006 and I retire at 65 my payments will be approx 260. per month. So, I figure that if I live to 80 I will collect \$260. for 180 months with a total of \$46942 over 15 years. But . . If I start taking payments this year and I live to 80 the I will be collecting for 384 months at \$119.48 per month giving me a total of \$45880 over 32 years.

Am I correct in my calculation of payout? If not, can some one give me the formula to calculate the bottom line?

Mega Thanks

The nominal amounts don't really matter. What is important is the present value of the two streams of cash. Using a very conservative discount rate, I come up with the stream of payments starting now is worth a LOT more than the stream of payments if you start at age 65 (about \$23k vs. \$15k). If I were in your shoes, I would start payments now.

Take it now--who knows where you will be at 65? I have a pension starting as early as 55 - I lose 4% for every year I take it before 65 or 40% less. I am taking it as soon as I can, then it is a sure thing-if I croak I plan on using it to help with my kids college costs in the short term and for mad money after-

brewer & Donzo

Thank so much for your feedback & and for giving me the answer that I wanted to hear.

They dont offer a lump sum option ?

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