Lump Sum or Monthly Pmts
Lump Sum or Monthly Pmts
After receiving a fixed monthly payment amount of $1,056 for six years, the company has offered me the choice of taking a lump sum payment of $128,000, or continuing with the monthly payments for life. I am seeking suggestions.
- jimb_fromATL
- Posts: 2278
- Joined: Sun Nov 10, 2013 11:00 am
- Location: Atlanta area & Piedmont Triad NC and Interstate 85 in between.
Re: Lump Sum or Monthly Pmts
How old are you?KipZoji wrote:After receiving a fixed monthly payment amount of $1,056 for six years, the company has offered me the choice of taking a lump sum payment of $128,000, or continuing with the monthly payments for life. I am seeking suggestions.
- Taylor Larimore
- Posts: 32842
- Joined: Tue Feb 27, 2007 7:09 pm
- Location: Miami FL
Re: Lump Sum or Monthly Pmts
KipZoji:KipZoji wrote:After receiving a fixed monthly payment amount of $1,056 for six years, the company has offered me the choice of taking a lump sum payment of $128,000, or continuing with the monthly payments for life. I am seeking suggestions.
Welcome to the Bogleheads Forum!
More questions:
How is your health?
Are you married? If so, what is your spouses age and is a joint payment available?
Do you feel the monthly payment is a secure guarantee?
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: Lump Sum or Monthly Pmts
Age: 72
Marital Status: currently single
Health: good
Company is secure
Marital Status: currently single
Health: good
Company is secure
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- Posts: 2985
- Joined: Tue Apr 01, 2014 11:41 am
Re: Lump Sum or Monthly Pmts
Immediateannuities.com quotes that 128,000 would buy an immediate annuity of only $873/month for a single male. A $1,056/month annuity would cost $156,000.
If your health is poor, like heart problems, cancer, or diabetes, this might be a reasonable deal. If you are in normal or better health, not a good deal.
Ralph
If your health is poor, like heart problems, cancer, or diabetes, this might be a reasonable deal. If you are in normal or better health, not a good deal.
Ralph
- Taylor Larimore
- Posts: 32842
- Joined: Tue Feb 27, 2007 7:09 pm
- Location: Miami FL
Re: Lump Sum or Monthly Pmts
KipZoji:
According to http://www.immediateannuities.com, the highest lifetime income obtainable with an investment of $128,000 in a commercial insurance company is $873/month.
In my opinion, your guaranteed income of $1,056/month is a bargain compared with their lump sum offer and subsequent investment risk.
Best wishes.
Taylor
According to http://www.immediateannuities.com, the highest lifetime income obtainable with an investment of $128,000 in a commercial insurance company is $873/month.
In my opinion, your guaranteed income of $1,056/month is a bargain compared with their lump sum offer and subsequent investment risk.
Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle
Re: Lump Sum or Monthly Pmts
Taylor,
Thanks very much. That is the conclusion I am coming to.
Cheers,
Kip
Thanks very much. That is the conclusion I am coming to.
Cheers,
Kip
Re: Lump Sum or Monthly Pmts
$1056/month equals $12,672 per year. That goes into $128,000 a little over ten times.
If you think you might live longer than ten years, take the $1056/month!
If you think you might live longer than ten years, take the $1056/month!
pjstack
Re: Lump Sum or Monthly Pmts
Thanks, pjstack. I agree.
Re: Lump Sum or Monthly Pmts
This question , lump sum or annuity , seems to come up often and if you search on the topic you get a flood of responses which are hard to sift through - but if you search by author and enter G$$ you'll get a more manageable list - in my opinion he gave some very thoughtful ,thorough, and knowledgeable responses to this question.
It will still take a little time to read the responses but a worthwhile exercise in my opinion.
It will still take a little time to read the responses but a worthwhile exercise in my opinion.