Should I Take My Pension In Payments Or As Lump Sum?



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21 thoughts on “Should I Take My Pension In Payments Or As Lump Sum?

  • Aaron Venema

    (October 15, 2020 - 11:35 pm)

    Lump sum because pensions going bust

    Manatti06

    (October 15, 2020 - 11:35 pm)

    I wonder what Dave's take would be on teacher's taking their lump sum pension at retirement vs leaving it in. Most teachers leave it

    Vince T

    (October 15, 2020 - 11:35 pm)

    God raised Jesus Christ from the dead.
    Amen

    Vince T

    (October 15, 2020 - 11:35 pm)

    Vitamin D3 5000 lU needs to be taken every day . God Bless you and your Family.

    Vince T

    (October 15, 2020 - 11:35 pm)

    Mr. Biden wants to raise your taxes and take your 2nd Amendment away.

  • Jeff Richey

    (October 15, 2020 - 11:35 pm)

    He needs to differentiate between a government pension and a non-government pension plan. We don't know how long we are going to live, but an industry standard to use is 20 years. If you figure the monthly pension that you are scheduled to get and multiple that by 12 years and then living 20 years retired (to find out your likely lifetime payout), you will find that number is dramatically (extremely) better than a lump sum payout with interest. Plus, the pension is guaranteed. Even if the government entity changes eligibility and the rules for the pension plan, the old rules are almost always grandfathered in; so you're safe. He reeeeealy needs to differentiate, so that he doesn't end up sending someone down the wrong path.

    T KC

    (October 15, 2020 - 11:35 pm)

    Just bad advice. Dave considers this important question without EVER uttering the words "relative value"
    In the US, pension plans have to disclose the "relative value" of their various optional forms of payment, including lump sums. A relative value of around 100% means the different forms of payment are roughly equal in actuarial present value. A relative value significantly lower than 100% would indicate the lump sum is a bad deal.

    For example, if the lump sum being offered is the actuarial present value of the participant's accrued (payable at age 65) benefit, but the participant is eligible to commence their benefit early with no reduction for early commencement (a "subsidized" early retirement benefit), then taking the lump sum would be a very bad deal for the participant.

    It is unfortunate that a pretty good guy like Dave Ramsey should confidently offer such poor and potentially costly advice.

    ann hans

    (October 15, 2020 - 11:35 pm)

    I don't think taking a lump sum is a good idea. YOu can never bet on the stock market to give you that kinds of returns. Or you end up spending it all and end up with nothing.

    Ghost of Manitou

    (October 15, 2020 - 11:35 pm)

    I've never heard of that type of pension. The one where I work is 2.25 % of your base salary per year of service. This would put me at about 60% of my base salary at retirement and it goes at that rate plus adjustments for inflation as long as I live. That supplemented with a 4% draw down my 401K and my ROTH will put me right around my base salary amount forever.

    Donna Lutheran

    (October 15, 2020 - 11:35 pm)

    We have something called a cash balance which goes to my beneficiaries. I can take as a lump sum, an annuity or roll to an ira when my employment ends when I retire. They put in 5% of my salary plus it earns interest. I have a small lump sum compared to most of you.

  • ronald rusin

    (October 15, 2020 - 11:35 pm)

    ByDepends on your health!

    rory calhoun

    (October 15, 2020 - 11:35 pm)

    LUMP SUM!!!!

    take to a casino, and ONE spin of the roulette wheel, and you double your money with a bet on BLACK!!!!

    and everybody knows what Wesley Snipes says: 'ALWAYS BET ON BLACK!!!!'

    👨🏾‍🦱

    CSM1470

    (October 15, 2020 - 11:35 pm)

    Why didn’t Dave ask what the monthly pension was if they didn’t take the lump sum?

    young timer

    (October 15, 2020 - 11:35 pm)

    I retired 5 years ago and have already drawn more than the lump sum offer. No regret as I expect to live another 20. Also, my children are doing well and don’t need the inheritance.

    F Huber

    (October 15, 2020 - 11:35 pm)

    If you are good at self control, you are best taking your money as a lump sum.
    If you tend to spend every dollar you have, living paycheck to paycheck, you take the payments or you'll die broke.
    .
    Most people in Dave's programs are developing the self control to not spend it all the day they get it.
    .
    I did the math on Social Security.
    Taking it at 62 vs 72, I would have to live past 85 before you were better off waiting… without accounting for missed opportunity to gain interest on the money collected between 62 and 72… (doesn't matter which year I start taking the payments for between 62 and 72, it comes out about the same)
    So, I'll take the payments ASAP.
    They promised me I'd start collecting social security at 55 when they forced me to start paying into it… They've already stolen 7 years of payments from me.

  • kinanee priscilia

    (October 15, 2020 - 11:35 pm)

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    Trevor Nash

    (October 15, 2020 - 11:35 pm)

    Very interesting advice

    김유미

    (October 15, 2020 - 11:35 pm)

    따뜻한 마음은 사람들을 매우 편안하게 만듭니다
    울진산부인과미프진약물낙태임신중절수술병원♥카톡CBVG♥

    Gordon

    (October 15, 2020 - 11:35 pm)

    I'm young and my previous company offered to buy out my pension. I turn down the lump sum because it was too low and the taxes on it was extremely high. I'm not near the retirement age so I told them to keep the lump sum. They gotta offer more money in order for me to take the lump sum.

    Tim T.

    (October 15, 2020 - 11:35 pm)

    Most pensions you can have joint survivorship where the spouse gets the same amount for life. Now if you both meet your demise in an auto accident will it really matter🤔

    Renee Citizen

    (October 15, 2020 - 11:35 pm)

    Rolling a 401k to a roth account u lose 10%

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