[Shelbyh]

Originally Posted by Rainger99

I have to make a decision on my pension.

I have the following options.

Please note that x changes below.

Single life annuity. I get x every month until I die.

10 year certain amount and life annuity. Pays out for my lifetime and fixed amount for 10 years. X here is about 94% of single live annuity.

50% joint and survivor annuity. I get x for my lifetime and wife gets .5x for her life. X here is 87% of single live annuity.

75% joint and survivor annuity. I get x for my lifetime and wife gets .75x for her life.
X is 81% of single live annuity.

100% joint and survivor annuity. I get x and my wife gets x for her life. X is 76% of single live annuity amount.

Lumpsum. A lumpsum payment. This would amount to 124 months of the single live annuity.

I am thinking the best choice is a lumpsum payment.

On all of the other choices (except for the 10 year certain amount and life annuity), if my wife and I die in a car crash a month after taking the pension, I am leaving a lot of money with the company. On the other hand, if we live 30 more years, we would do pretty well with the 100% joint and survivor annuity.

Any recommendations or suggestions? Thanks.

Quite a few variables to consider to include current health and age, financial picture, assets, etc. I can share our experience with this when my husband retired. gets His pension amount is 60% of his annual salary. That doesn’t change. Our decision was we could buy an annuity of any percentage of his pension which will only pay me(wife) if he dies first. Our financial advisor suggested to buy as much as we could afford based on our ages and other factors. We decided to buy 100% because I didn’t have a pension. So no matter what happens we are both good. Hope that helps.

[Caymus]

Originally Posted by Shelbyh

Quite a few variables to consider to include current health and age, financial picture, assets, etc. I can share our experience with this when my husband retired. gets His pension amount is 60% of his annual salary. That doesn’t change. Our decision was we could buy an annuity of any percentage of his pension which will only pay me(wife) if he dies first. Our financial advisor suggested to buy as much as we could afford based on our ages and other factors. We decided to buy 100%. So no matter what happens we are both good. Hope that helps.

And did you buy the annuity from that advisor?

[Rainger99]

I do appreciate all of the advice. I plan on talking to at least one financial advisor but I also thought that getting opinions from other people (that may be more objective because they will not get any commission) would be very helpful. Some of the people on TOTV have very good ideas.

I think that the more information I get, the chances are that I will make a better decision.

[Marine1974]

Originally Posted by Rainger99

I have to make a decision on my pension.

I have the following options.

Please note that x changes below.

Single life annuity. I get x every month until I die.

10 year certain amount and life annuity. Pays out for my lifetime and fixed amount for 10 years. X here is about 94% of single live annuity.

50% joint and survivor annuity. I get x for my lifetime and wife gets .5x for her life. X here is 87% of single live annuity.

75% joint and survivor annuity. I get x for my lifetime and wife gets .75x for her life.
X is 81% of single live annuity.

100% joint and survivor annuity. I get x and my wife gets x for her life. X is 76% of single live annuity amount.

Lumpsum. A lumpsum payment. This would amount to 124 months of the single live annuity.

I am thinking the best choice is a lumpsum payment.

On all of the other choices (except for the 10 year certain amount and life annuity), if my wife and I die in a car crash a month after taking the pension, I am leaving a lot of money with the company. On the other hand, if we live 30 more years, we would do pretty well with the 100% joint and survivor annuity.

Any recommendations or suggestions? Thanks.

I had similar choices . I was married . I chose 100% joint and survivor annuity . I received the pension . It was about $200 a month less . I was 60 my wife was
63 . If you chose this and divorce as I did my spouse was entitled to a portion of my pension depending on how many years she was married to me while I was working for the company I retired from .
It was 94 % of the time .
She gets alittle less than half monthly I receive alittle more .
If I die first I recover her portion and if she dies first I recover her portion for the remainder of my life . Since I was married to her 100 % of the time she worked I was entitled to what was left from her lump sum pension .
If your wife will not recover your portion of the pension if you die the company you worked for benefits. And same for if your wife dies first .

[Stu from NYC]

Originally Posted by CoachKandSportsguy

If the annuity is a fixed amount over the period of time, say until 90 years old,
and inflation is 4% per year over that time period, at what point won't the payment cover the monthly food bill?

Its not advice, its a question ie, size matters. .

95% of females will agree with you

[Stu from NYC]

Originally Posted by Shelbyh

Quite a few variables to consider to include current health and age, financial picture, assets, etc. I can share our experience with this when my husband retired. gets His pension amount is 60% of his annual salary. That doesn’t change. Our decision was we could buy an annuity of any percentage of his pension which will only pay me(wife) if he dies first. Our financial advisor suggested to buy as much as we could afford based on our ages and other factors. We decided to buy 100% because I didn’t have a pension. So no matter what happens we are both good. Hope that helps.

Wonder what this advise cost you in the long run.

[jcreason5616]

Originally Posted by Rainger99

I have to make a decision on my pension.

I have the following options.

Please note that x changes below.

Single life annuity. I get x every month until I die.

10 year certain amount and life annuity. Pays out for my lifetime and fixed amount for 10 years. X here is about 94% of single live annuity.

50% joint and survivor annuity. I get x for my lifetime and wife gets .5x for her life. X here is 87% of single live annuity.

75% joint and survivor annuity. I get x for my lifetime and wife gets .75x for her life.
X is 81% of single live annuity.

100% joint and survivor annuity. I get x and my wife gets x for her life. X is 76% of single live annuity amount.

Lumpsum. A lumpsum payment. This would amount to 124 months of the single live annuity.

I am thinking the best choice is a lumpsum payment.

On all of the other choices (except for the 10 year certain amount and life annuity), if my wife and I die in a car crash a month after taking the pension, I am leaving a lot of money with the company. On the other hand, if we live 30 more years, we would do pretty well with the 100% joint and survivor annuity.

Any recommendations or suggestions? Thanks.

No one can give you a good answer with that information. You described the options available through your company for pension payouts. What you did not mention was your age, your spouses age, the status of your health, how much you have accumulated in your pension account, what savings you have amassed for your own retirement, what you would do if you took the lump sum to protect those assets through the duration of your life, whether your wife is capable of handling those investments, should she be left a widow, and so much more. These are all questions that you need to work through on your own or with a pension professional. You also did not mention any other income that you receive on a monthly basis, which can also factor into your decision. Good luck!

[tophcfa]

Originally Posted by Tom52

I can give the the correct answer if you provide the following:

Your age
Wife's age
Your expiration date
Wife's expiration date

Without that information you have to make your best estimates and don't look back.

You forgot probably the most important tidbits of information.

How well is the pension plan funded?
What entity is funding the plan and what do their financials look like?
Is your plan backed by a third party like the Pension Benefit Guarantee Corporation, and if so, how does your lifetime annuity payments compare with the maximum guaranteed payments?

Bottom line, your analysis should carefully consider the likelihood that you will actually receive the lifetime annuity you are due if you select that option. Don’t blindly consider it to be a done deal.

[rsmurano]

never take out an annuity.
close the thread before somebody else gets sucked in on buying an annuity. The only people that make money on an annuity is the issuer, not the receiver.
You can make up to 20x more money in the stock market than any annuity will give you and quite a few index funds have very low risk.
Just because you/we are older, it doesn't mean that you need to stop making money.

[opinionist]

I had to make a similar decision some years ago, and I chose the annuity option rather than the lump sum to adjust for a budget shortfall. If you are financially secure without the extra income, the lump sum option could make the most sense because inflation will diminish the value of the income with time. If you take the lump sum, then be careful where you invest the money. Too many investments have a negative real return when inflation is considered. A financial advisor is helpful if they do not have a specific product line they are motivated to sell. For example, if you go to a car dealer, they will tell you that "the best choice for you" is a car on the lot (even if it is not).

[retiredguy123]

Take the lump sum payment.

[rjm1cc]

Remember when one of you passes, you lose the lower social security payment.
Not knowing your finances, age, or health I would take the option that pays the most to your wife after you pass.
I do not worry about what I leave to the company. I look at the pension as reliable monthly income with no market risks. Now if you want to leave a lot of money to someone you might have a different opinion.
Yes a meeting with a fee only planner is a good idea.

[manaboutown]

In my life major decision must pass my "sleep at night" test. Before I act on it I pretend I made a decision and then discover if I am resting easy with it.

People have different tolerance levels for financial risk for various reasons. I agree with talking with one or preferably more fee-only FPs who have substantial experience with people in your circumstances. Then weigh their recommendations and make your choice. You are the one who must live with it.

I also agree that posting on TOTV is a good idea. One never knows where a a useful suggestion may come from.

[Jalane]

Originally Posted by Rainger99

I have to make a decision on my pension.

I have the following options.

Please note that x changes below.

Single life annuity. I get x every month until I die.

10 year certain amount and life annuity. Pays out for my lifetime and fixed amount for 10 years. X here is about 94% of single live annuity.

50% joint and survivor annuity. I get x for my lifetime and wife gets .5x for her life. X here is 87% of single live annuity.

75% joint and survivor annuity. I get x for my lifetime and wife gets .75x for her life.
X is 81% of single live annuity.

100% joint and survivor annuity. I get x and my wife gets x for her life. X is 76% of single live annuity amount.

Lumpsum. A lumpsum payment. This would amount to 124 months of the single live annuity.

I am thinking the best choice is a lumpsum payment.

On all of the other choices (except for the 10 year certain amount and life annuity), if my wife and I die in a car crash a month after taking the pension, I am leaving a lot of money with the company. On the other hand, if we live 30 more years, we would do pretty well with the 100% joint and survivor annuity.

Any recommendations or suggestions? Thanks.

Your spouse would appreciate getting 100%!

[Stu from NYC]

Originally Posted by manaboutown

In my life major decision must pass my "sleep at night" test. Before I act on it I pretend I made a decision and then discover if I am resting easy with it.

People have different tolerance levels for financial risk for various reasons. I agree with talking with one or preferably more fee-only FPs who have substantial experience with people in your circumstances. Then weigh their recommendations and make your choice. You are the one who must live with it.

I also agree that posting on TOTV is a good idea. One never knows where a a useful suggestion may come from.

The problem with posting this here is that someone may give an answer that sounds good, the op acts on it and than learns it was the worst possible thing to do.