Best way to stream income from a lump sum pension

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bdbkt5
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Best way to stream income from a lump sum pension

Post by bdbkt5 »

I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout? I will have about 70K cash in savings in a regular savings/checking account. I plan on working part time still. Any advice would be greatly appreciated.
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FiveK
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Re: Best way to stream income from a lump sum pension

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If the part time income plus some withdrawal from the cash will pay expenses (including tax) for the next five years, a Roth conversion ladder may work well.
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bdbkt5
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Re: Best way to stream income from a lump sum pension

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That was one of the things I have been looking into. Thank you. I am trying to do my own research and came across this board.
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FiveK
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Re: Best way to stream income from a lump sum pension

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BestCoast123
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Re: Best way to stream income from a lump sum pension

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bdbkt5 wrote: Fri Oct 16, 2020 1:08 pm I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout? I will have about 70K cash in savings in a regular savings/checking account. I plan on working part time still. Any advice would be greatly appreciated.
If you want an income stream, why not stick with the pension?
Dottie57
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Re: Best way to stream income from a lump sum pension

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BestCoast123 wrote: Fri Oct 16, 2020 6:27 pm
bdbkt5 wrote: Fri Oct 16, 2020 1:08 pm I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout? I will have about 70K cash in savings in a regular savings/checking account. I plan on working part time still. Any advice would be greatly appreciated.
If you want an income stream, why not stick with the pension?
I agree. I generally think of an income stream as steady periodic payments ( monthly, quarterly, yearly). SS qualifies. Or an SPIA.

For myself in retirement, I picked a yearly percent recommended here (3.5 to 4%) as max from my investments. Calculate that amount and divide by 12. That is my monthly amount I pay myself on the first of each month.

Hope that helps.
chassis
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Re: Best way to stream income from a lump sum pension

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bdbkt5 wrote: Fri Oct 16, 2020 1:08 pm I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout? I will have about 70K cash in savings in a regular savings/checking account. I plan on working part time still. Any advice would be greatly appreciated.
Is there an option in the pension offer to take a stream of payments now? I am taking a lump sum from a previous employer's pension. Another option in the offer package included an annuity that would start immediately. This would stream income for you.
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Stinky
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Re: Best way to stream income from a lump sum pension

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bdbkt5 wrote: Fri Oct 16, 2020 1:08 pm I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout?
As others have said, an excellent option to “stream income” from an employer pension is to take a monthly income from the pension plan. Hope that’s an option for you.

You could roll the lump sum into a SPIA from an insurance company. But almost always the monthly income from a pension plan exceeds the monthly income from a SPIA.
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ResearchMed
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Re: Best way to stream income from a lump sum pension

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Stinky wrote: Sat Oct 17, 2020 3:30 pm
bdbkt5 wrote: Fri Oct 16, 2020 1:08 pm I am 50 years old. I am wondering what the best way to stream income from a $680K lump sum pension buyout?
As others have said, an excellent option to “stream income” from an employer pension is to take a monthly income from the pension plan. Hope that’s an option for you.

You could roll the lump sum into a SPIA from an insurance company. But almost always the monthly income from a pension plan exceeds the monthly income from a SPIA.
You could double check

www.immediateannuities.com

to get a rough estimate of what commercial life annuities would generate in terms of monthly/annual income, and compare that with what your pension plan would offer for similar terms (age at start, etc.).

RM
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