Pension Lump Sum Analysis
Pension or Lump Sum?
In recent years, many employers have offered their retirees and/or employees the option of taking a lump sum in lieu of a regular monthly pension benefit. The lump sum benefits are often in the hundreds of thousands of dollars, but which option is best?
The short answer is: it depends. What interest rate is the company assuming in calculating your lump sum? How long will you live? And what about your spouse? Inflation can eat up the fixed monthly payments over time, steadily eroding your standard of living in retirement. What investment return will you need to make on a lump sum? Are there tax benefits of one option over the other?
Every situation is different so it takes some objective analysis. Unfortunately, you won’t get that from someone that wants to sell you their investment products. At Vintage, we’re fiduciaries that put our client’s interests first. And we’ve done a lot of these analyses over the years. Sometimes there’s a clear cut answer on which option is best, but it often comes down to your decision. But to make a good decision, you need the numbers and risks laid out clearly and objectively.
Our complimentary analysis can give you the information you need to decide how to proceed. Contact us to get yours started today.
Are You Ready to Retire?
An early retirement offer or a lump sum option often create some urgency around your retirement decision. But they are just one factor in the more complex decision of your retirement readiness. There’s taxes, Social Security strategies, inflation, 401(k) options, longevity factors, health care costs and much more that go into a comprehensive retirement plan.
At Vintage, we offer prospective clients with at least $500,000 in potential investment assets (including employer plan balances like 401(k)s or lump sum offers) our Financial Sourcebook. This comprehensive plan covers retirement planning along with investment, estate, insurance and tax planning.
We don’t charge our clients extra fees for financial planning services. And for prospective clients, we’ll offer the Financial Sourcebook plan for just $500. Plans like these typically cost around $3,000 but we’d like to show you how we can help before you make a substantial commitment. We’ll even waive the $500 fee if you decide that we’re a good fit for you.
You can get started right now by downloading our Financial Data Questionnaire to help guide you on the information we’ll need to prepare your plan. And you can schedule a convenient time to meet, too. Or just pick up the phone and give us a call at (734) 668-4040 or (800) 666-9237.