Thanks to you and the other responders. I watched my lump sum drop 25% in July 2022 when the new segment rates used by my company dramatically increased....
Many individuals has experienced recent dramatic declines in their available lump sum alternatives due to the rise in interest rates.
If you expect interest rates to rise you are generally better off taking a lump sum now.
If you expect interest rates to fall you are generally better off taking a lump sum when they bottom.
If you roll the lump sum over into an IRA you have flexibility prior to your RMD years about how much, if any, distribution you should take.
I lean towards the pension because I want to use it to partially fund my "Minimum Dignity Floor" (The Retirement and IRA Show podcast). The concept is to use guaranteed money (pension, SS, and a TIPS ladder) to pay for essential spending and use the rest as discretionary/fun spending. I hope this will free my mind to spend more.
Retiring fairly early and getting a guaranteed 7% return, I feel like delaying the decision for a few years. I'll see how it goes.
Thanks again.
Statistics: Posted by Free to Choose — Mon Apr 29, 2024 8:10 pm — Replies 4 — Views 662