Considerations for a Lump Sum Pension Distribution
In recent years, many employees have been presented with offers by their employer or former employer for a lump sum pension distribution. This irrevocable decision should not be taken lightly, and careful analysis should be performed.
Look before you leap, items to consider:
- Are you planning on the income for your retirement or would you like to leave the funds to your estate?
- What interest rate is the company using to calculate your lump sum?
- What is your current health situation?
- Consider your spouse/life partner?
- What is the financial condition of the company/pension plan?
- Is your monthly pension benefit fully insured by the Pension Benefit Guaranty Corporation? (PBGC is an independent federal agency that pays benefits to participants of failed plans.)
- Is the plan a single employer or multi-employer plan?
- Does the monthly benefit index for inflation?
Consult a Fiduciary Advisor
Every situation is unique and requires objective analysis. Our team has extensive experience evaluating pension plans and we understand the complexities and nuances of many public and private plans. Contact us today for a complimentary evaluation of your plan.
Disclaimer: The opinions voiced and information provided in this document is for informational and educational purposes only. It should not be considered investment, financial, or legal advice. Nothing herein constitutes a recommendation to buy, sell, or hold any security or financial instrument. Magnolia Private Wealth does not provide tax, legal or accounting advice. Investing involves risk, including the potential loss of principal. You should consult with a qualified financial advisor, tax professional, or other appropriate professional before making any financial decisions. The author and publisher assume no liability for any losses or damages resulting from the use of this information.
