Lump Sum Package With Details

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Barefootgirl
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Lump Sum Package With Details

Post by Barefootgirl »

The lump sum offer is $121,400 or $533/month for life, starting in 45 days. I am 54 years old.

Under the existing terms, I am not eligible to begin receiving payments until 11 months from now and payments would still be $533/month, so out of the box, from the monthly payment perspective, this new offer is better.

Monthly payments are not adjusted for inflation, under the existing terms or the new terms.

Using www.immediateannuities.com, in exchange for $121,400, I received quotes ranging from $506 to $527 per month, so the current offer also seems slightly better from that perspective.

Other considerations:

I am planning to retire in just over 4 years. I do not need the cash now and I'm in the 28% tax bracket.

Upsides to taking the money up front - it's under my control and I can invest and hope the value grows over time.

The downside is I take the money and the value drops in whatever investment I choose to place it in.

Of course, in the monthly annuity, the value will drop as well due to inflation and declining purchasing power, since there is no escalation factor. In order to come out ahead, I need to at earn amounts equivalent to future inflation rates.

I would want to roll it over to avoid taxes. I currently have a Govt TSP account and a Roth....no Traditional IRAs.

Thoughts, comments, suggestions, anything I am missing here?

Thank you, BFG
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Meg77
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Re: Lump Sum Package With Details

Post by Meg77 »

I would take the lump sum. Annuities are offering low payouts right now because they are linked to interest rates, which are still near historical lows. Plus as you say, inflation would erode the value of that monthly benefit in a big way.

You'd only have to earn 2.6% per year on the lump sum to get the same $533 per month. My checking account pays 2% and in any event when rates rise over the next few years (and when they rise even further in later years) you'll be able to easily exceed that with a low risk investment like CDs or money market funds. Sure you have to manage it yourself, but at least you would still have the money to pass on when you die. If you take the annuity and die next year all that money is just gone.

EDIT - My calculation above is wrong. You'd really have to earn more like 5.3% on the lump sum to come out even. That's much more of a toss up.
Last edited by Meg77 on Fri Sep 26, 2014 4:03 pm, edited 1 time in total.
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furwut
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Re: Lump Sum Package With Details

Post by furwut »

Do you also have the option to just take your pension at your normal retirement date?

I just received a lump sum option from my employee as well. 'Tis the season …
In my exit interview I remember talking with our benefits coordinator about these lump sum offers. He intimated they were always in the companies favor - and that's what I found with my offer. My lump sum would only buy a deferred annuity giving 60% of the income stream that I was otherwise entitled to if I simply waited until I was 65. I'm waiting. :moneybag
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Re: Lump Sum Package With Details

Post by furwut »

Do you also have the option to just take your pension at your normal retirement date?
The reason I ask is that when you receive a pension payout in advance of your normal retirement date the amount is actuarially reduced. In my case the discount rate was 5%. So they way i see it by waiting until age 65 to start my payout I'm getting a guaranteed 5% return (company is solid and pension backed by PBGC).
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Yes, there is a third option. I can do nothing, stay with the existing plan and either receive $533/month starting next year
OR receive $1,515.00/month at age 65.

The pension is PBGC guaranteed.

BFG

ps - maybe furwut, you are older than me, so you don't have as long to wait for 65 to arrive?
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Meg77
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Re: Lump Sum Package With Details

Post by Meg77 »

Barefootgirl wrote:Yes, there is a third option. I can do nothing, stay with the existing plan and either receive $533/month starting next year
OR receive $1,515.00/month at age 65.

The pension is PBGC guaranteed.

BFG

ps - maybe furwut, you are older than me, so you don't have as long to wait for 65 to arrive?
In this case I also advocate for waiting. If nothing else you may get more generous lump sum options as you approach 65, but in general pensions are the best deal around - which is why companies aren't offering them anymore and are trying to get employees currently on them to opt out. To get $18K a year is the equivalent of appx a $455,000 lump sum (assuming a 4% withdrawal rate), and it comes with the burden of managing the money yourself into your 90s. Even if you were confident you could do that, you aren't likely to be able to grow your $121K payout into even half that amount in the next 9 years. Wait till retirement age if at all possible!
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dolphinsaremammals
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Re: Lump Sum Package With Details

Post by dolphinsaremammals »

Meg77 wrote: You'd only have to earn 2.6% per year on the lump sum to get the same $533 per month.
How are you calculating to get that %?
furwut
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Re: Lump Sum Package With Details

Post by furwut »

2 years your junior big Sis :)

I think the question you should be asking is can I take the lump sum offered today and buy a deferred annuity starting at age 65 that will be more than the $1515/mo the pension would give.

Immediate annuities will give you an online quote for a 10 year deferred annuity which is close enough.

I early retired this year at age 51 3/4. I think it is important to have a secure floor of income that you can't outlive nor can disappear overnight in some market crash. My pension that I will receive at age 65 (with allowance for moderate inflation each year) plus deferring social security to age 70 (and allowing for a possible 25% reduction in benefits) provides more than enough.
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Maybe it should or shouldn't go without saying, but since I am eligible beginning at 55, I don't have to wait until 65 to begin receiving payments. Of course, for each year after 55, it will be higher than $533, but lower than $1515...somewhere in between. I don't have the reduction calculator info nearby.

BFG

PS - furwut, congrats on your ER!
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Meg77
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Re: Lump Sum Package With Details

Post by Meg77 »

dolphinsaremammals wrote:
Meg77 wrote: You'd only have to earn 2.6% per year on the lump sum to get the same $533 per month.
How are you calculating to get that %?
I have no idea! Just tried to recalculate it and now keep getting 5.3% ($533x12)/$121,400 Thanks for catching that it does indeed change things. I'll edit my earlier post. :oops:
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furwut
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Re: Lump Sum Package With Details

Post by furwut »

Immediate annuities will give you an online quote for a 10 year deferred annuity which is close enough.
I got a quote for a 54 year old female living in FL (which is where all Barefootgirls reside don't they?). To replace your pension payout starting at age 65 we are talking around $200,000. You can see why the company is eager for you to take the lump sum offer today.
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Re: Lump Sum Package With Details

Post by cherijoh »

Barefootgirl wrote:The lump sum offer is $121,400 or $533/month for life, starting in 45 days. I am 54 years old.

Under the existing terms, I am not eligible to begin receiving payments until 11 months from now and payments would still be $533/month, so out of the box, from the monthly payment perspective, this new offer is better.

Monthly payments are not adjusted for inflation, under the existing terms or the new terms.

Using http://www.immediateannuities.com, in exchange for $121,400, I received quotes ranging from $506 to $527 per month, so the current offer also seems slightly better from that perspective.

Other considerations:

I am planning to retire in just over 4 years. I do not need the cash now and I'm in the 28% tax bracket.

Upsides to taking the money up front - it's under my control and I can invest and hope the value grows over time.

The downside is I take the money and the value drops in whatever investment I choose to place it in.

Of course, in the monthly annuity, the value will drop as well due to inflation and declining purchasing power, since there is no escalation factor. In order to come out ahead, I need to at earn amounts equivalent to future inflation rates.

I would want to roll it over to avoid taxes. I currently have a Govt TSP account and a Roth....no Traditional IRAs.

Thoughts, comments, suggestions, anything I am missing here?

Thank you, BFG
Hi BFG, Thanks for posting the details of your offer. I will be making the same decision, once I get my buyout letter, so it helps to have another data point. It sounds like your deal is better than most I have seen posted here.

I think it boils down to whether you are willing to trade increased longevity and market risk for the reduced inflation risk. Since we are currently at historically low interest rates, you could take the lump sum roll it in an IRA at your targeted AA. Then you could invest in an SPIA at a later date if you are concerned about longevity risk - since you would be older, the payout per month would be higher.

As far as market risk, I would look at your the success rates with a retirement calculator like FIRECALC based on your current nest egg + the lump sum - if you have a high probability of success at your expected withdrawal rate, then I wouldn't worry too much about the increased market risk either. If it were borderline for success, then the annuity might make sense just to guarantee a floor.

Just my two cents.

EDIT: I overlooked your post that your normal pension amount was $1515/month. Your offer is just 35% of your pension at 65 - this seems very low based on my experience. My pension has a reduction factor of 4%/year - your reduction is almost 6%/year.
Last edited by cherijoh on Fri Sep 26, 2014 5:06 pm, edited 2 times in total.
Pizzasteve510
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Re: Lump Sum Package With Details

Post by Pizzasteve510 »

Good replies above. My only 2 cents is that I don't necessarily agree that interest rate rises in the future are inevitable. Trends suggest that a rise in rates is likely, but looking at Japan (where I used to live), it is not unthinkable to have very low growth, low interest and stagnant performance in equities for extended time periods, even in a relatively well run, modern, technologically savvy, high investment economy.

I would want to know the rest of your portfolio and if current cash, a long bond-like asset, or a future asset of greater value fits your asset mix best.
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Re: Lump Sum Package With Details

Post by investor1 »

You mentioned retiring at 59 (1/2?). Did you plan on taking the pension distributions at that point? If so, how much would they be?

If you were to take the buyout offer, what would you do with the money? Buy an annuity? Roll the money into your TSP or IRA? Would an annuity that starts payments in four years beat the pension distrubtion? Do you think you can add enough to your SWR by investing the lump sum according to your investment plan over the next 4+ years until retirement to beat the non-inflation adjusted pension distrubtion that you'd be giving up? Is it worth the risk? Will the company disappear?
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Re: Lump Sum Package With Details

Post by Barefootgirl »

cherijoh-

I think it boils down to whether you are willing to trade increased longevity and market risk for the reduced inflation risk.


If we're talking about the same thing here, then yes, this is what I was mulling over last night after dinner, with my Friday cocktail.

market risk = investing the lump sum and managing it on my own according to my AA?

reduced inflation risk = risk of declining value of the annuity (pension) value over time?

longevity risk - not sure I am following you here. If I do nothing and take the pension at normal retirement age, 65, I would have to live at least to 72.5 years of age (give or take a couple months) to receive the $121,400 offered now...living longer than that is the premium.

Again, not sure if I am tracking correctly with your analysis. Thank you, BFG
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Did you plan on taking the pension distributions at that point? If so, how much would they be? This current offer just fell in my lap last week, I had not gotten that far into my retirement planning. Ive spent the past 25+ years concerned with accumulation, now just beginning to plan for decumulation, which appears to be a different game with its own rules - and rules not as popularly spelled out - seems there are many more books written on how to accumulate wealth, than spending it down wisely.

If you were to take the buyout offer, what would you do with the money? Buy an annuity? Roll the money into your TSP or IRA? Would an annuity that starts payments in four years beat the pension distrubtion? Do you think you can add enough to your SWR by investing the lump sum according to your investment plan over the next 4+ years until retirement to beat the non-inflation adjusted pension distrubtion that you'd be giving up? Is it worth the risk? Will the company disappear?

These are the current questions, restated, thank you. The company is more likely to merge or get bought out than disappear, either way, the pension is PBGC guaranteed.

Thank you, BFG
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Another thought - how does tax treatment figure into the analysis?

If a lump sum is rolled over, the earnings won't be taxed until withdrawals are made from the account, so there is tax free growth there for as long as the money remains in the 401K or TSP (401k-like) account or the IRA.

If pension payments begin before I retire, they will be taxed as ordinary income on top of my regular income, at 28%.

After retirement, if I begin taking payments, they will still be taxed as regular income, but at a lower rate, due to a lower income level.

I am planning to retire early somewhere between the ages of 58-59, part of that plan is subsidized healthcare from my current employer, which will require that I also take a second annuity (pension from the current employer) immediately, in order to be eligible for subsidized healthcare. If this plan doesn't work out (in the case that I leave the current employer before eligibility kicks in), I will still retire early, but likely to instead purchase health insurance through the ACA and for someone in that age range, I am thinking income level will factor heavily into insurance rates.

Yikes, i need coffee.

BFG
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Frugal Al
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Re: Lump Sum Package With Details

Post by Frugal Al »

Meg77 wrote: To get $18K a year is the equivalent of appx a $455,000 lump sum (assuming a 4% withdrawal rate), and it comes with the burden of managing the money yourself into your 90s. Even if you were confident you could do that, you aren't likely to be able to grow your $121K payout into even half that amount in the next 9 years. Wait till retirement age if at all possible!
Meg, the 4% SWR assumes inflation indexing, so that isn't a fair benchmark with a nominal pension. Somewhere between $240k and $290k would probably be necessary to pay $18.2k from age 65 through age 88. As far as managing money into one's 90's, you're acting like the funds can't be annuitized at a later date. At today's lousy rates it would be about $290k. Having said that, this is very nice pension if the OP can elect to hold off until age 65, with an IRR over 6% through age 88. I know I'm often a proponent of lump sums, but they have to make sense. Unless a better offer came up, I'd wait to take this pension at age 65 if at all possible.
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Re: Lump Sum Package With Details

Post by DonCamillo »

Barefootgirl wrote: I am planning to retire early somewhere between the ages of 58-59, part of that plan is subsidized healthcare from my current employer, which will require that I also take a second annuity (pension from the current employer) immediately, in order to be eligible for subsidized healthcare. If this plan doesn't work out (in the case that I leave the current employer before eligibility kicks in), I will still retire early, but likely to instead purchase health insurance through the ACA and for someone in that age range, I am thinking income level will factor heavily into insurance rates.

BFG
The health care coverage is hard to value. My retirement came with health care at age 55, but it was vastly inferior to my coverage at my new employer. I have kept it, paying nothing by using a free option, but have never used it, as I always had better coverage. Next year, it is being changed to a Medicare supplement plan, which requires me to pay for Medicare Part B, which will cost me $1300 to $1700 per year, and force the cancelation of my current employer provided coverage, which stops if I am on Part B. If I do not take this "deal," I lose my entitlement to future coverage. Bottom line was that the lifetime medical package was part of my motivation to accept my package, and I will receive zero benefit. I will probably retire at age 72 to 75 without subsidized health care, but I will have the option of keeping my current plan and paying the full cost myself.
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Re: Lump Sum Package With Details

Post by cherijoh »

Barefootgirl wrote:cherijoh-

I think it boils down to whether you are willing to trade increased longevity and market risk for the reduced inflation risk.


If we're talking about the same thing here, then yes, this is what I was mulling over last night after dinner, with my Friday cocktail.

market risk = investing the lump sum and managing it on my own according to my AA? <-- yes that your portfolio will generate sub-par performance - if you are an indexer with a balanced portfolio that boils down to what the market is doing; if you were betting on a specific stock then there would other risks lumped in here

reduced inflation risk = risk of declining value of the annuity (pension) value over time? <-- yes, your portfolio will hopefully generate a positive real return (i.e., after inflation); since your pension payments are set in nominal dollars with no COLA they will be worth less in the future -- unless we get hit by deflation.

longevity risk - not sure I am following you here. If I do nothing and take the pension at normal retirement age, 65, I would have to live at least to 72.5 years of age (give or take a couple months) to receive the $121,400 offered now...living longer than that is the premium. <-- I meant that taking a lump sum (instead of the guaranteed monthly payout) was a risk if you lived longer than your life expectancy. With a pension or annuity, the company or insurance provider takes on this risk. Since there are a pool of people the insurance company expects it to balance out with some people dying early. As an individual, you are faced with the possibility of running out of money if you live to a ripe old age.

Again, not sure if I am tracking correctly with your analysis. Thank you, BFG
I hope the comments above clarifies what I meant.

Having seen the difference between your early pension amount and the pension at 65, you also need to decide whether or not you need the money early in order to fund your retirement. The penalty for taking it early is pretty steep. Were the only options to take it at 55 or 65, or could you choose an alternate date and get an intermediate amount? Before you got the early buyout offer, what were your plans? Were you planning to start taking your pension at the earliest date, as soon as you retired, or at 65? Do you have a payout amount for your previous targeted retirement date?

For my pension with my former employer, I lose 4% per year (0.33% per month) for the difference in start date vs. when I hit 60. (This is due to having worked there more than 15 years - otherwise the start date would be compared to when I hit 65 with the same yearly penalty).
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Re: Lump Sum Package With Details

Post by randomguy »

Meg77 wrote:
Barefootgirl wrote:Yes, there is a third option. I can do nothing, stay with the existing plan and either receive $533/month starting next year
OR receive $1,515.00/month at age 65.

The pension is PBGC guaranteed.

BFG

ps - maybe furwut, you are older than me, so you don't have as long to wait for 65 to arrive?
In this case I also advocate for waiting. If nothing else you may get more generous lump sum options as you approach 65, but in general pensions are the best deal around - which is why companies aren't offering them anymore and are trying to get employees currently on them to opt out. To get $18K a year is the equivalent of appx a $455,000 lump sum (assuming a 4% withdrawal rate), and it comes with the burden of managing the money yourself into your 90s. Even if you were confident you could do that, you aren't likely to be able to grow your $121K payout into even half that amount in the next 9 years. Wait till retirement age if at all possible!
You need to compare with an annuity not with a 4% SWR. How that will work out is anyones guess. Imagine you earn 6-7% (pretty reasonable for a 60/40 type investment) and interest rates go up 2-2 points over the next 10 years (also reasonable). And of course with the lump sum you get the flexibility of spending the money if your diagnosed with cancer at 56, annuitizing at any point along the way, and so on. In exchange you are taking on market risk which can be good or bad. There really isn't a right answer in general to this stuff. You can run math all day long and the numbers come out really close and you can come out with cases (markets drop 50% for the decade, inflation averages 8%) which make either choice look stupid. In general the pensions tend to offer slightly better terms than annuities but it tends not to be huge.
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Re: Lump Sum Package With Details

Post by cherijoh »

This article dates back a few years to when Ford and GM made their big push to get employees to take a lump sum or an annuity from an insurance company. But it is a pretty good overview of the decision process. I think the part I quoted is especially pertinent.

http://www.kiplinger.com/article/retire ... ffers.html
Before deciding to end your monthly income stream, you must weigh personal factors, including health status and desire to leave money to heirs. Such careful deliberation requires a resistance to the "wealth illusion" that makes many people leap at the chance to grab a lump sum. The big pot of money "makes you feel rich," says Steve Vernon, president of retirement education firm Rest-of-Life Communications, in Oxnard, Cal. "People like seeing a lot of money in their account and don't understand how much it takes to generate income for the rest of your life."
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Re: Lump Sum Package With Details

Post by The Wizard »

Barefootgirl wrote:Maybe it should or shouldn't go without saying, but since I am eligible beginning at 55, I don't have to wait until 65 to begin receiving payments. Of course, for each year after 55, it will be higher than $533, but lower than $1515...somewhere in between. I don't have the reduction calculator info nearby...
I would take the monthly payments, not the lump sum, but I would certainly wait until after you terminate full time employment, in four years or whatever it comes to...
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tuningfork
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Re: Lump Sum Package With Details

Post by tuningfork »

A couple more things for your consideration. If you have a low income during early retirement you can take advantage of things like tax gain harvesting (0% capital gains taxes in the 15% bracket) and Roth IRA conversions (pay IRA taxes at a lower rate than later when you will be in a higher bracket). If you were planning to do either of these, then taking the lump sum or deferring the pension until 65 would make sense. Of course this means you have sufficient funds in taxable accounts in the interim to live on, and to pay the Roth taxes, until you take SS and your pension.

Employer-provided retirement healthcare is a bit of a crap shoot these days. My own former-employer has stated they are considering dropping the retiree healthcare plan and are actively encouraging retirees to switch to the ACA, so all the years I looked forward to getting this benefit may be for naught.
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

The timing of this offer comes at a time when I was just beginning to consider the various options I have for retirement income streams, so I did not already have a fixed plan.
When I retire, I will definitely start taking an immediate pension earned through my current employment position. Tentatively, I was planning to live on that second pension plus withdrawals from my retirement accounts while deciding when to draw SS income and this first pension income...so, there are 4 income streams altogether - 2 pensions, SS and account withdrawals (and hopefully, subsidized healthcare.)

BFG
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maxq
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Re: Lump Sum Package With Details

Post by maxq »

BFG, I have a similar opportunity from a former employer: $140K lump sum this January or $985/month starting January, or $1257/month starting at age 65 (5 years from now). These amounts are locked in and are not inflation-protected. The lump sum is undervalued--it'd need to be ~$200K to be equivalent to the annuity amounts. I also have other pensions with COLA's and will draw SS when eligible and needed. I've pretty much decided to go with the middle option and start drawing an annuity in a few months. My rationale is that I might as well get some benefits from the pension while I can still enjoy them or invest them. I'm retired, happily divorced, debt free, and do not have inheritance worries as my daughter will receive significant other assets upon my death. I have military medical coverage (TRICARE Prime), so that's not a huge concern I need to budget for. My calculations show it'd take about 10 years to hit the point at which deferring the annuity until age 65 would have been a better financial choice. It'd be even longer if I factored in the future value of the age 65 annuity or the investment value of the "early" payments. You also have to factor in the enjoyment factor of having an extra stream of income at an unexpectedly early date. For me, maybe that's larger charitable contributions; two months in Mazatlan each year instead of one; a month annually in Dubrovnik instead of a week; a new Lexus 450 instead of a 350, etc.

One thought on the PBGC protection: My neighbor had what he thought was a great pension plan that'd be protected by the PBGC if his employer went under. However, shortly before he was to retire, the company sold the pension plan to an insurance company. Apparently when this happens, the pension is no longer protected by PBGC and instead is backed by state insurance guarantee associations. In Texas, that is limited to a value of $250,000, and then only if the insurer is licensed in the state.
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Thanks max and others. As of today, I am leaning against the lump sum and leaning toward staying under the current terms. The only thing that is all or nothing right now is taking the lump sum. Later, if it turns out that I need more income, I can begin taking the pension payments...I will be eligible beginning in 2015 and forever after that.

BFG
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Barefootgirl
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Re: Lump Sum Package With Details

Post by Barefootgirl »

Employer-provided retirement healthcare is a bit of a crap shoot these days. My own former-employer has stated they are considering dropping the retiree healthcare plan and are actively encouraging retirees to switch to the ACA, so all the years I looked forward to getting this benefit may be for naught.

tuningfork - would you be "grandfathered in"? i.e. would they translate the benefit you've earned to credits toward paying your share of the ACA plan?

BFG
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tuningfork
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Re: Lump Sum Package With Details

Post by tuningfork »

Barefootgirl wrote:Employer-provided retirement healthcare is a bit of a crap shoot these days. My own former-employer has stated they are considering dropping the retiree healthcare plan and are actively encouraging retirees to switch to the ACA, so all the years I looked forward to getting this benefit may be for naught.

tuningfork - would you be "grandfathered in"? i.e. would they translate the benefit you've earned to credits toward paying your share of the ACA plan?
No details are available yet, they are just saying they are considering dropping the retiree healthcare benefit. Given the financial condition of the company (not good) we expect they will just drop the benefit and not offer any credits toward the ACA. It won't be the first retiree benefit they yanked without compensation (retiree dental was dropped last year).
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Re: Lump Sum Package With Details

Post by Buffett_wannabe »

Barefootgirl wrote:Another thought - how does tax treatment figure into the analysis?
It looks as if you have a pretty good handle on federal income taxation issues to do with the pension. Don't forget to consider state taxes, especially since there are many more wrinkles to state taxation of pensions. Nine states have no income tax or interest and dividends only, more exempt Social Security, more still exempt federal and own-state pensions (out-of-state government pensions vary a lot), and a couple exempt everything. Some states cap exemptions for defined-contribution plan withdrawals or don't exempt them at all (MD for example fully taxes IRA's, or did until recently). I honestly have no idea how states handle taxation of TSP distributions. Kiplinger has a decent overview, although data on the web is notorious for getting out of date and checking with the state revenue departments before deciding is essential.

That is only one angle of course; I advocate a holistic view of retirement planning, weighing as many factors as your brain can carry and deciding what is best for you. From an income perspective, knowing the constraints that your priorities impose can inform how you arrange the rest of your affairs. For example, you've said that you have to start taking pension benefits when you retire from your present employer to be eligible for paid retiree health care. Since that establishes a baseline fixed income, you can subtract that from your estimated needs and allocate the rest of your assets to make up the difference. If you live in or move to a state that treats SS benefits more favorably than private pensions or DC plans, you might start funding your needs from those assets first and delay taking SS benefits to minimize taxes later. Cost of living counts too; a theoretically more retirement-friendly location can be much more challenging if you need so much to live there that you exhaust your assets more quickly. (Austin looks more and more like living proof :( )

I'd be remiss if I didn't mention that PBGC backing is by no means guaranteed to stay that way. The retirees from the pension plan I'm in who are being fobbed off on an insurance company will no longer have the PBGC backstop, only the guaranty fund that reinsures annuity policyholders in their state. Those are typically less generous than PBGC, sometimes by a lot. I am inclined to consider this the new baseline for sizing up private pension security.

I guess in closing, if you know what you want out of retirement, IMHO delay taking this pension as much as you can while still getting there.

hth,
Craig B.
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