Here's a question: What kind of effects does the interest rate (prime/LIBOR/etc) have on annuities?
Well typically as the rate goes down, the value of the "lump sum" goes up. So he's gonna be at his high water mark right now for distribution.
It has no impact on the monthly amount that will be his payment.
ETA: I would also think it would be much more advantageous to take the tax hit this year, given the current and projected tax environments. Thoughts?
The only problem with that is that you have to calculate some future ROR on the money that was pulled out and invested into something else. But overall I agree that it will be much more advantageous from a tax standpoint to distribute those funds today than at some point in the future.
It's really up to him. Does he want a guaranteed payout (which is not a bad amount of monthly payment) or does he want control and risk transferred to him?
ETA: But I see no reason to distribute. He can just do a rollover. But he's 47 years old. If he retires at 60 he only has 13 years of growth left. If I'm in his same exact position, I'm taking the annuity.
This post was edited on 10/25 at 2:41 pm