A client recently told me that he was planning on taking the lump sum pension because he heard from Dave Ramsey this is the best option. Are you kidding me?! You are making one of the biggest financial decisions of your life based on a four paragraph article by Dave Ramsey? I know the guy is THE financial guru, but he doesn’t know your personal … Continue reading Disagreeing with Dave Ramsey Regarding the Lump Sum Pension
Everyday I get a new question regarding pensions. Almost all of these stem from a fellow co-worker who’s part-time gig is armchair financial advisor. Today, my client was shocked to hear from fellow automobile design engineer/lump sum expert, that he would only receive 45% of the lump sum, because the other 55% were eaten away by taxes. My clients co-worker wasn’t even close, and worse … Continue reading The 5 Biggest Myths About Pensions
If you are married and have a monthly pension, the recommendation is almost always to take the Joint & Survivor pension benefit option. This means that while both you and your spouse are living, you will draw a slightly reduced pension compared to a Single Life Annuity. The benefit is that if the pensioner dies first, the spouse will still receive a benefit for his … Continue reading Joint and Survivor Pension Benefit or Insure Yourself?
I can offer one piece of advice on making a decision between taking a monthly pension vs. a lump sum; don’t listen to your financial advisor! There may be nobody who benefits more from you deciding to take the lump sum than your financial advisor. And guess what, your financial advisor will almost always suggest a lump sum. Is this because your advisor has looked … Continue reading Should I Take the Lump Sum or Monthly Pension?
Unfortunately, I’ve seen it before. A soon to be retiree has to make the decision to take a monthly pension or the lump sum annuity. He decides that he likes the flexibility that the lump sum option offers and decides to forego the monthly annuity. Once he gets the lump sum, he takes a distribution to pay off the remaining balance of the mortgage. Next, … Continue reading The Lump Sum Pension Issue That You’ve Probably Never Considered