Author Topic: ***Half Million or $30K/yr for life?***  (Read 5084 times)

Radagast

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Re: ***Half Million or $30K/yr for life?***
« Reply #50 on: May 16, 2018, 08:18:46 PM »
So the question is 500k in an IRA vs 30k annually? I don't know how valuable the protection of a peanut butter and gelly chandwhich is. 20 years? I think I might take 500k in this case.

MDM

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Re: ***Half Million or $30K/yr for life?***
« Reply #51 on: May 16, 2018, 08:33:04 PM »
Considering if the lump sum is not risked and is left uninvested, the corporation is betting that I'll die in 16.7 years and if I take the lump sum, I agree with them.  I think I will live past the 16.7 years.  That's the way I see it.
True, that is the left edge of the chart in this post.

One could also put the lump sum in ~risk-free CDs and/or Treasuries and get ~3%, pushing the breakeven lifespan to ~23-24 years, etc.

boarder42

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Re: ***Half Million or $30K/yr for life?***
« Reply #52 on: May 18, 2018, 02:57:51 AM »
I see comments about the money being "tax free."  When is anything tax free?  You will defer the tax on the lump sum by rolling it all into an IRA.  The IRS would tax you on the $30K/year and eventually on the $500K once they force you to start withdrawing out of the IRA. 

This is a PBGC protected pension from a major corporation.  You are allowed a lump sum option or an annuity.  I have longevity in my family, one never knows, but I could live into my 90s. 

Considering if the lump sum is not risked and is left uninvested, the corporation is betting that I'll die in 16.7 years and if I take the lump sum, I agree with them.  I think I will live past the 16.7 years.  That's the way I see it.

These are old plans most here aren't familiar with and most don't care to research. You started this thread in the most criptic way. And we've had to peel the details out of you. If you want the best answer throw all the information you have on the table. Is the 30k inflation protected and if so for how long.