For those that have pensions. Lump sum? With the idea you can invest it to keep up with inflation? Or pension guaranteed income that wont keep up with inflation

To me inflation is a killer. 3% inflation means your buying power will be half in 20 years. I like the lump sum

Lump sum seems like a bad idea for my situation.

I rolled mine in to IRA's at Fidelity , so far 10 months later it is doing good .

Lump sum, leave in a pension the money dies with you, It usually does not do as well either.

Both. I rolled a 12 month partial lump sum distribution into an IRA. Adding the rollover IRA to my other retirement investments and will be letting those accounts grow for another 12-14 years before we start withdrawing it. It will be a massive raise if we stay the course and will offset any lost value of the pension dollar by that time. Note I retired young at 55 and have a 457, govt employee version of a 401k. If I were older and did not have other investments I likely would have done it different.

No lump sum worked for me but either way seems to work. Different strokes for different folks.

I think it depends on when you retire.

If i retire at age 50, 65% of my salary over the next possibly 30+ years is a lot of money paid out and I have the option to have those payments continue to my wife if I die first.

If I retire at 65 maybe it would be better to pull the money out.

I haven't ever heard of anyone pulling money out in a lump sum, I honestly didn't even know it was an option maybe it's not in my pension??

We do have a "drop" option which I don't fully understand but if guys stay til 56 they are getting a 6 figure lump sum plus the monthly payout.

There must be over a hundred different combinations of ways of handling retirement. For example if you take the full pension, you could continue to invest early in your retirement to help offset inflation later. I can't put pension money in IRAs, but I have a small business and my wife still works. So until that changes I max out our IRAs and this year likely going to open a solo 401k as well. Or you could invest pension check money into a taxable brokerage account, but stick with buy and hold forever type stocks and index ETFs without selling and you would only have to pay taxes on the dividends until such time you start to sell shares to withdraw and offset the lost value of your pension dollar. I started this way as well when I have extra money to invest. Note I drive a 1999 Suburban and have almost no debt. No debt is the true secret to retirement. Don't put in a swimming pool and get a new truck and bass boat loan the year before you retire. Seen a lot of guys do it and end up having to go back to work a year or two later.

Mine offered a max lump sum of 36 months which would lower the pension check considerably.

One of my pensions offered the option. The other didn't. I never took the lump sum on the one that offered the option.

Heck yes

TMRS?

There is a maximum lump sum you can take. It is not the balance of the whole account, there is a cap on it. You'll still get a monthly, check, it's just less. I will probably take the lump sum. Eligible in 5 years, but will be too young. We will see.

I did the math when I retired at 62. Decided the lump sum was not an attractive option.

Yeah tmrs looks alot better with 25 years and over 50 thats fo sho

Depends on age and amount compared to monthly payment, and how long are you going to live?

Figure 4-5% withdrawal on lump sum for safe long term retirement income. So if $1,000,000 lump sum you can figure 30 year retirement at $40-50k a year (rough numbers).

I'll have 25 years and be 46 years old.

I don't want to work another 4!

No, private pension.

Well not sure exactly what it falls under. It's our firefighter pension just for our department.

It's is a Defined Benefit Plan

With the option to do the DROP from age 53-56

Ours is based on the Fed rate so a lot of guys are taking the lump right now; with rates down the lump sum is up.

Same where I work...

Depends on the pension. I already get a military pension and will get a teacher's pension. Neither has a lump sum option. If I had the chance at a lump sum I don't know if I would do it. Both my military pension and teacher's pension will have COLA attached so inflation won't have much of an impact. I will also qualify for SS if the thieves in DC don't give it all to the crack whore and welfare queens.

I hear ya JG . I got other things I need to be doing

There’s no way around it. I have 30 years and am 49.
I year, 3 months and 3 days left. This Dec 31st may be my last day then burn earned sick time.

Yup, our city dosent pay for banked sick time. Bad choice

Folks with a Defined Benefit plan should try to find out how well funded it is. Take the pension for Dallas police and firefighters, it is still barely funded on a percentage basis. It was about insolvent a few years ago and then got a Bandaid. We read and hear about municipality and state pensions around the country that are almost broke.

The director, or whatever title he had, of the Texas Teacher Retirement System was on CNBC many years ago. TRS was a shining example of well run pensions. Now that pension has been on a downward trajectory as for as funding for several years on a percentage basis. I think the state will do whatever it takes to take care of educators. I don't know if that can be said for all pensions.

That kind of information would help in deciding whether to take a lump sum, if available, vs. gambling on the pension actually being there when the time comes.

How Dallas didn't lose every single person that works there I dont know. They got lucky. They did have a ton of people retire do to losing the " drop" which was a reason to work there