My father recently discovered he has a pension of 80,000 from a company he worked for. Currently it’s in a BASF annuity that will pay monthly, but won’t pay out to a beneficiary should something happen to my him. He’s old and not taking care of himself well, so that might happen sooner than I’d like. I know so little about this, so it would be great if I could hear some advice, other options, thoughts, etc?
He has met an “independent insurance advisor” who is trying to talk him into transferring it from the BASF annuity into a "Sentinel Security Life index annuity" that will pay out to a beneficiary (me) when my father passes.
Of course that would not be good to see the money lost after he’s gone, but I want to do what’s best for him now.
From the reading I’ve done, I can see his options of what to do with the pension money as:
Lump sum payout. Pros: he’d get the money and be able to do something with it while he’s around. Cons: he makes about 1900 a month now and this would kick him into an income bracket for the year where he wouldn’t be able get discounted heart medications. He’s on many of those which are costly.
Transfer it from the BASF annuity to the Sentinel Security Life “Index annuity” that the independent insurance advisor is trying to sell him on. Pros: My father would be getting monthly payments and it would pay out to me when my father dies. Cons: concerned about hidden costs/obligations hidden in the paperwork with the independent insurance advisor. No benefit is market goes up. Would it be difficult to retrieve the money once my father passes? Is this kind of set up from a independent insurance advisor generally sketchy?
Stock Market - Pros: could make more money. Cons: obviously could lose a lot too and not enjoy any money while he’s around.
Roll the 75,000 in an IRA/trust fund & take out the “minimum required distribution” each year.
I want my father to enjoy the money, but I’m not sure how much time he has left with the way he’s taking care of himself. My first thought was for him to do the lump sum and enjoy it and take care of some things like mortgage payments, but he won’t be able to afford his discounted heart medication if he were put in a different income bracket. My biggest concern was the fast sell of the insurance advisor guy’s index annuity and how legit that is. So I’m brainstorming and asking for some tips. Thanks!