quote:
Let's pretend I have the option of taking a 60,000 year pension or a 1 million dollar lump sum. The $60K is guaranteed for 5 years but will pay for the life of me or my spouse. The pension advantage is that there would be a steady income for 'life.' Of course, if I take the pension and my wife and I expire at an early age, then my daughter ends up with nothing instead of 'something.' with the national debt what it is and the interest rates becoming the size of Defense budget, I'm worried about the future market correcting/stagnating for a long period of time. BUT, I'm also worried about hyperinflation if we print money to pay our debt. So, locking in on a pension that would never change might bite me in the arse in my later years. How about it, guys? I'll have to make a decision in the next 1 or 3 years. Loved to hear MT opinions.

I'd suggest that you compare the distribution structure that you're being offered in the pension to a similar annuity product. You can't really compare the pension (annuity) distributions to bond or equity returns, because some of what you'd be getting would be a return of principal, not just a return on principal. Apples and oranges.

Also, you'd want to do a deep dive on the financial health of the company's ability to pay this pension longer term. Is the pension plan fully funded or underfunded? I had an issue a few years ago when a company I had a pension with imploded. It's just something to look at. There is the PBGC, but it's not as cut & dried as it could/should be.

Just do some homework and make sure that you're comparing apples to apples when you compare distributions across plans. And since you have a likely heir (and this thing dies with you and/or your wife), that may figure into your decision too. That wasn't a consideration for me, but I still opted for a lump sum and rolled it into an IRA. Right or wrong, I preferred to control my own destiny.