Liz Weston: Lump-sum pension buyout will require investment management later in life
Posted May 09, 2021
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By Liz Weston
Dear Liz: I had a pension from a previous employer that was going to pay me $759 per month at 65. They offered me a lump-sum buyout about five years ago of around $65,000. I ran the numbers and decided that was definitely not enough money and declined.
Then last year they upped the offer and the new lump sum amount was $125,000. I ran the numbers again and this time decided to grab the money and roll it into an IRA. I’m 63 and plan to retire at 70. I can hopefully grow that $125,000 to $250,000 by that time, which would give me that much more to live on, plus it gives me more discretion on using that money than just getting the monthly payment the pension would have paid me.
Legal MetLife denies stonewalling DoL over missing-pensioner subpoena
Reuters
4 minute read
A statue stands atop Grand Central Station in front of the MetLife building in New York, October 8, 2008. REUTERS/Lucas Jackson (UNITED STATES)/File Photo/File Photo
The U.S. Labor Department has stepped out of its lane by demanding documents related to âProject Chestnut,â MetLifeâs post-2017 outreach program for pensioners who never sought payment under annuities their employers had purchased for them, the companyâs lawyers told a federal court in Manhattan.
The Labor Departmentâs jurisdiction to investigate ERISA violations ended âat precisely that moment in timeâ when the pension-plan sponsors fulfilled their ERISA responsibilities by purchasing their Group Annuity Contracts from MetLife, Maeve OâConnor of Debevoise & Plimpton wrote in opposition to a January subpoena.
Retirement Plan Literacy Will Pay Off For Your Clients
Delaware State News (Dover)
April was Financial Literacy Month, and why you likely saw articles with financial-planning recommendations, such as set goals, track spending, boost savings and understand concepts like diversification and compound interest. Some articles may even have suggested you can become a millionaire by the time you reach Social Security age, if you follow the authors advice.
Although those articles might be helpful, the Pension Rights Center is taking a different path. Instead of the standard advice, we will offer a multipart series discussing financial questions that you may not find elsewhere to tell you what you need to know if you have access to a retirement plan at work and hope to one day have a secure and dignified retirement.
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Even in states that currently offer free two- or four-year public college options, the aid is typically limited to free tuition, which means students still have to pay for books, housing, meals, transportation and other costs. Some programs are need based, which means not all students qualify, and many students choose other non-free options, such as private colleges and graduate school.
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So the advice hasn’t changed: If you can save for college, you probably should. You may not be able to cover all the costs of your children’s future education, but anything you save will probably reduce their future debt.
Liz Weston: Should retiring worker take lump-sum pension payment? Not so fast
Updated 7:30 AM;
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By Liz Weston
Dear Liz: I’m 67 and I’m going to retire later this year. My wife is already retired, and our kids are grown and on their own. I have a 401(k) that I’ve contributed to for most of my working years, and a small traditional IRA. I also have a grandfathered pension plan through my employer.
I’m leaning toward taking the pension benefits as a lump sum and rolling it directly to either my 401(k), which my company allows, or my IRA. Would you recommend using the 401(k) to receive the pension rollover? Or would the IRA be the better choice?