Retirement Crossroads: Lump Sum Vs. Pension And The Test That Helps You Decide | Wes Moss

[@FernandoBowen-78]

I'm 54 and my wife and I are VERY worried about our future, gas and food prices rising daily. We have had our savings dwindle with the cost of living into the stratosphere, and we are finding it impossible to replace them. We can get by, but can't seem to get ahead. My condolences to anyone retiring in this crisis, 30 years nonstop just for a crooked system to take all you worked for...

[@AlinaMathilda]

I feel your pain mate, as a fellow retiree, I’d suggest you look into passive index fund investing and learn some more. For me, I had my share of ups and downs when I first started looking for a consistent passive income so I hired an expert advisor for aid, and following her advice, I poured $30k in value stocks and digital assets, Up to 200k so far and pretty sure I'm ready for whatever comes...

[@FernandoBowen-78]

@@AlinaMathilda That's actually quite impressive, I could use some Info on your FA, I am looking to make a change on my finances this year as well

[@AlinaMathilda]

@@FernandoBowen-78 My advisor is VICTORIA CARMEN SANTAELLA;

[@AlinaMathilda]

You can look her up online

[@LiamOlivia-4]

@@AlinaMathilda The crazy part is that those advisors are probably outperforming the market and raising good returns but some are charging fees over fees that drain your portfolio. Is this the case with yours too?

[@dantheman6607]

I have a pension and almost everyone takes the lump sum to have control over their money and possibly leave it to their family if they didn’t spend it all

[@Mychellechic]

did you do monthly payout or rollover

[@krissycus]

Exactly what I was wondering- very clear and concise. Thanks!

[@pickandstrum]

Thanks I am retiring today and have been looking for this sort of information very helpful!

[@dantheman6607]

Did you take the lump sum ? Just curious.

[@MisterUrbanWorld]

@@dantheman6607 8 months later, still waiting on pickandstrum to respond

[@cruisecrazy]

Thank you for this great video that explains the math and decision factors so clearly. My pension works out to 8% of the lump sum offer. I’m just worried because my company will be turning over the pension to a yet unnamed insurance company. Not sure how this will affect future pension payments, but I should be covered by the PBGC. Thanks again for sharing such valuable information.

[@outlaw565]

I heard that PBGC is in the red .you might want to check it out. If they go bankrupt that would not be good for you. And there’s no saying that they won’t go bankrupt in the future.

[@jiggeplaya7182]

I have this exact option in my company. Very useful information!

[@Kevin-jf5bw]

The issue is that 6% threshold is mostly a return of what would be the lump sum principle. The actual IRR on the annuity is generally close to 2% unless there is COLA. 2% is a fairly low IRR hurdle to exceed.

[@yourdailyblockchain]

Thanks for the vid - this helps. With today's calculation - looks like my pension % works out to about 10.9%

[@landctrain]

Most important to remember is that when you die so does your pension (single life annuity) and when you have the lump sum you have something to pass on to heirs. Inflation eats up your monthly checks over the years and makes the money almost worthless after 10 plus years if you live that long.

[@chrisloh745]

i assume that if you intend on taking the joint annuity that you would use that number correct?

[@ro6384]

mine works out to 7.9%. Half of my pension includes COLA. I have no heirs. I feel more comfortable doing the monthly I think, paying a tax bill on the lump makes me feel sick lol. What to do?

[@danasimmons2513]

You have the option of rolling over a Lump sum into an IRA and deferring taxes until you withdraw or RMD's
You would still pay taxes on the monthly annuity option as well.

[@danasimmons2513]

Mine is around an 8% return and as long as I live it will work out well for the monthly annuity option but offers no COLA. I am still leaning towards the monthly because I have other monies in tax deferred, brokerage and Roth savings and could use some income in the interim so I can defer SS.

[@Kevin-jf5bw]

@@danasimmons2513 8% is very generous. how about take half the excess annuity payment over and above the 4-5% lump withdraws in the early years and invest that money in equities for late in life when inflation would be most painful.

[@charliehargrave7458]

Lump sum always and invest in index mutual funds. after you die you want the money in your pocket not the companies pocket.

[@danasimmons2513]

Heck yeah, I will make sure they line my coffin in dollar bills.

[@katman8714]

Take the lump sum, tomorrow isn't guaranteed 😮

[@larriveeman]

I have a fed pension with COLA

[@MikeNapoli1989]

I have a municipal pension. It’s great

[@RichardRietdijk]

if you die one month into retirement, your heirs either get that lump sum.. or 0.

[@dantheman6607]

Not if you take the pension with survivor benefits

[@danasimmons2513]

Not if you do a 100% joint survivor, then your spouse would get 100% until their death.

[@Sky1]

Take the monthly and stiff your wife? If I want my wife to get my pension money the monthly payment is much less

[@dantheman6607]

Mine is about $150 a month less

[@chrisloh745]

@@dantheman6607 for 100% ?

[@thomasucc]

Are you out of your mind, never take lump sum

[@HungNguyen-se8dn]

Lump sum will face immediately high taxes for the year. Pension will spread the taxes out on nany years. Do what is the best for your particularly situation. 😂🎉

[@danasimmons2513]

You can roll over the lump sum into an IRA and defer the taxes until you take out the money.

[@tessncali5422]

How do you compute accounting for taxes? Meaning, do you use the lump sum amount computation with and AFTER TAX amount? Or before? Thank you!