Lump Sum

Recently, many companies are offering lump sum pension options or sometimes called a buyout option. A lump sum offer seems simple yet it can be complex when you attempt to compare it with more traditional monthly income options. When considering a lump sum buyout, several questions arise:

Is the amount of the lump sum enough to last me for my life and/or my spouse's lifetime?
Where would I invest it to guarantee it would be safe, yet earn enough interest?
What would I do if faced with a financial emergency or crisis?
If I die prematurely, how will my spouse and/or family be affected?

With Pension-Max customized planning approach we can help you answer those important questions and provide you the guarantees that you need. Please see the example below of a recent retired autoworker and how the lump sum option worked out for him.

Mr. Smith (name changed) received a letter from General Motors called "Your Personal Benefit Summary" - GM Salaried Retirement Program ("SRP") Voluntary SRP Lump Sum Offer CLICK HERE FOR SAMPLE LETTER. This letter explained all of Mr. Smith's options:

Choice 1: Voluntary Lump Sum Payment - One-time Payment in the amount of $391,649.04

Choice 2: Continue current monthly pension payment - That amount was $2545.33/month

Survivor Benefit $1654.46/month

Choice 3: New 50% Joint & Survivor Monthly Benefit - That amount was $2531.63/month

Survivor Benefit $1265.82/month

New 75% Joint & Survivor Monthly Benefit - That amount was $2402.26/month

Survivor Benefit $1801.70/month

Based on the options shown above and taking into consideration Mr. Smith's age and his spouses age we at Pension-Max were able to design a plan that allowed Mr. Smith to take control of his finances by selecting the Lump Sum Offer. The designed plan will allow the income amount to last both Mr. Smith's life as well as not being reduced for his surviving spouse while still receiving an amount similar to his current monthly pension payment.

Obviously not all offers can be taken as a lump sum but if you would like a free analysis of the options given to you please contact Pension-Max today!