Typical late career / near retirement choices:
Modeling actual retirement choices: actual example from finance challenge friend:
(my actual model is much more detailed than presented for them)
Which would you choose?
Choice 1:
Lump sum transfer to IRA $200,000
Doesn't occur if working spouse dies while employed
Choice 2:
Working spouse takes pension early, $2,200 per month, stops upon death of spouse
Doesn't get paid out if spouse dies while employed
Choice 3:
Working spouse takes pension early, $1,100 per month, continues to non working spouse until death. Doesn't get paid out if spouse dies while employed
General assumptions:
Married, Current tax bracket rate 22%
Investment return 10% estimated going forward (mine for simple assumption)
Health of family is normal / average. . .
Hint:
Model shows that both living AT 80 years old, with 4% investment return all accounts, before inflation:
Choice #1 on IRA with RMDs and RMDs reinvested, the ending asset total
equals
Choice #2 ending asset total, with the same assumptions, just all in taxable amounts versus split IRA/Taxable.
What would you choose?
comment: that doesn't get paid out if spouse dies while employed is one of those getting kicked in the balls. . . . makes one think about retiring when the time comes and not working because you are afraid there isn't anything else. .
former finance guy
who can't let go of helping out friends with financial dilemmas. . .
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