Pension Decision Time! Lump Sum vs Annuity

As financial advisors, we’ve received thousands of questions from clients over the years. On our Top 3 list of frequently asked questions, is this, “What should I do with my company pension when I retire?” If you’re fortunate enough to have a pension at work, this will be one of the most important and irreversible decisions you’ll make during your transition to retirement. However, we’re confident that once you’re prepared with the right information, you won’t have any regrets about your decision!

First, it’s crucial to understand the specifics of your company pension:

·         Is it qualified or unqualified?

·         Does it offer survivor annuity payments?

·         Will the survivor payments be reduced?

·         Are monthly payments adjusted for inflation?

·         Is there a partial lump-sum option?

Equally important, is to understand how your decision fits your family needs.

·         Are you OK with losing control of your assets in order to collect a monthly income stream?

·         What legacy do you want to leave to your beneficiaries? (i.e. if you annuitize your pension, they may get nothing after your passing).

·         Are your retirement income needs already being met, negating the need for an additional income stream?

·         Do you want your assets to grow over time?

We’re here to help! We’d love to sit down with you and work through these questions in order to determine the best course of action. Together, let’s make a plan!

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