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Started By
Message
Retirement - 1M lump sum or 5k per month until death.
Posted on 8/19/21 at 7:58 am
Posted on 8/19/21 at 7:58 am
I’m a heathy 58-year-old with no debt. My company pension plan gives me choice to take one-time lump sum of 1M or receive 5k per month until I die. What should I take?
29
Posted on 8/19/21 at 8:00 am to VanJoe
quote:
no debt
quote:
1M
This post was edited on 8/19/21 at 8:02 am
Posted on 8/19/21 at 8:01 am to VanJoe
Take the mil and dump it in sli and pqeff
I work at your company too. All us millenials get for retirement is an offbrand Apple Watch and free burial insurance if we’re strong enough to climb into the dumpster
I work at your company too. All us millenials get for retirement is an offbrand Apple Watch and free burial insurance if we’re strong enough to climb into the dumpster
Posted on 8/19/21 at 8:03 am to SaDaTayMoses
Takes him 16+ years to hit a million (yes I know the taxes will be different) and 5k in today’s dollars is not equal to 5k in 15 years. Not even close.
1M all day.
1M all day.
Posted on 8/19/21 at 8:05 am to METAL
Pqeffs time is gonna come
Posted on 8/19/21 at 8:05 am to VanJoe
I wish social security would offer me something like this (I’m 42). I pay the max amount every year. I think I’d accept $250k now and eat the loss instead of my anticipated 100% loss
Posted on 8/19/21 at 8:05 am to el Gaucho
What’s your PT again. Getting really tired sitting on this one.
Posted on 8/19/21 at 8:08 am to METAL
Just gonna hold forever. They’ll get the offer they can’t refuse eventually
Posted on 8/19/21 at 8:16 am to VanJoe
1M lump sum all day.
Like others have said, it would take 16 1/2 years to reach 1M from the 5k payments and with inflation on its current path, dollar for dollar that money you get later will be worth a hell of a lot less than what you get now.
Also, if you can average 6% returns annually with that 1M, you are making that 5k anyway assuming you spend your return.
Like others have said, it would take 16 1/2 years to reach 1M from the 5k payments and with inflation on its current path, dollar for dollar that money you get later will be worth a hell of a lot less than what you get now.
Also, if you can average 6% returns annually with that 1M, you are making that 5k anyway assuming you spend your return.
Posted on 8/19/21 at 8:17 am to VanJoe
1m no doubt. 5k stops when you die, the several hundred thousand you should have left (depending on the rest of your scenario) can go to kids/family/charity.
Posted on 8/19/21 at 8:18 am to VanJoe
VYM would give you $2300ish a month. Not sure what other income streams you have, but leaving 2500 on the table each month is huge.
Posted on 8/19/21 at 8:18 am to VanJoe
quote:
My company pension plan gives me choice to take one-time lump sum of 1M or receive 5k per month until I die. What should I take?
That's a 6% return OP. How does the 1 mil work as far as taxes go? You can very likely beat that fairly easily especially if you go very conservative the first 2-3 years OP. Take just 4% or $40k/ year for 3-5 years and let it build up to $1.2 mil and then take out the $60k/ year and you are almost guaranteed to be in great shape.
I'd take the lump sum all day long though, its in your control for one. But most importantly your estate keeps it after your death.
FWIW they are likely holding 1.2 mil or 1.4 mil on your behalf. So if you do the 1 mil they benefit also.
Posted on 8/19/21 at 8:52 am to VanJoe
frick...taco bell pays well
Posted on 8/19/21 at 8:59 am to baldona
I can roll the 1 mil to an IRA account, and pay tax on the amount withdraw.
Posted on 8/19/21 at 9:17 am to VanJoe
Does the 5k adjust over time for inflation? Are there survivor benefits for spouse or family?
Posted on 8/19/21 at 9:18 am to VanJoe
ONE MILLLLLLLLLLLLLLLLLLLLLLLLLION DOLLARZ!!!!!!
Posted on 8/19/21 at 9:19 am to VanJoe
You need to find out if the $5,000 is a "Period Certain", so if you die, will someone else get it for a certain period of time. If not the case, do the $1,000,000.
Posted on 8/19/21 at 9:36 am to VanJoe
$5,000 monthly payment if you are around 30 more years present value at 5% apr is $935,288.95
If you are going to make it past 88 maybe take the $5k
Anybody suggest better discount rate vs 5%
If you are going to make it past 88 maybe take the $5k
Anybody suggest better discount rate vs 5%
This post was edited on 8/19/21 at 9:37 am
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