Many Visteon, Ford and GM people will be faced with the daunting choice
of taking their pension in a lump sum.
The option could mean more retirement income flexibility, more
retirement income, protection from inflation, tax savings, and a larger inheritance
to leave to heirs. Or it could lead to
running out of money. It’s a difficult
choice and there is no simple answer.
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In our piece, Ford/GM Pension Lump Sum Choice: Risks &
Considerations [pdf], we look at many factors that may come into play from the math
to your personality. We consider the
impact of inflation on fixed payments, the potential risk of losing the monthly
payments to bankruptcy, as well as the investment market risks and investor
behaviors that can be costly. Your age,
health, marital status and even your gender may play into your decision as
well. The article wraps up with a pros
and cons chart but, in the end, it will be best to consult a professional (see
our other piece, Ford/GM Pension Lump Sum Choice: Where to get help [pdf]).
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Contact us for a complimentary initial consultation or call (800) 666-9237
Pension Vs. Lump Sum Scenarios
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If you'd like a quick look at just your pension vs. lump sum decision
we've developed a report that considers a number of factors to help you
make an informed choice. The analysis considers your age, any pension
survivor benefit, your life expectancy and then looks at various
inflation and investment scenarios. It then summarizes which option may
provide you with the most money over your lifetime(s) based on the
various assumptions.
It can answer questions like:
- What if inflation picks up?
- What if investment returns are lousy?
- What if we live into our 90's?
The
30 page report is available to be reviewed in person, via an e-mailed pdf, or
mailed to your home. We're also available to consult with you about the
decision for up to 30 minutes. The cost is just $100.
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A Piece of Your Overall Retirement Plan
Your overall retirement income plan may include your 401(k)
balance, your spouse’s assets or pension, and Social Security in addition to
the pension or lump sum option. A comprehensive
look at your overall financial status will help you understand your position
much better and can help lead you to the best choice for you.
Our team at Vintage is here to help. We offer a complimentary initial meeting
where we can answer many of your questions.
If you decide you’d like a more thorough analysis we can prepare a
financial plan that looks at your retirement income, net worth, investments,
estate planning, taxes, insurance and more.
If you opt to become one of our clients there’s not even a charge for
the plan and, if you decide not to work with us, the fee is just $500, a
fraction of what many CFPs charge. Feel
free to contact our office with any questions or to arrange for an initial
meeting.
Download the articles in pdf: