Content starts here
CLOSE ×

Search

Reply
Contributor

Take pension lump sum?

Thanks for your responses. Original post deleted by author.

0 Kudos
4,666 Views
5
Report
Contributor

I would take the annuity with 75% survivor. Even though it is the lowest monthly amount, it is still paying 5.65%, if my math is correct. That's good in todays environment. It also protects your wife, if something happens to you. Just my opinion.

0 Kudos
4,601 Views
3
Report
Honored Social Butterfly

"..... Even though it is the lowest monthly amount, it is still paying 5.65%...".

 

How are you calculating a return of 5.65%?


"...Why is everyone a victim? Take personal responsibility for your life..."
0 Kudos
4,596 Views
2
Report
Contributor

$316/ month X 12 months = $3792/year

 

3792/67000 = 0.05659701492537 rounded to 5.65%

 

 

0 Kudos
4,587 Views
1
Report
Honored Social Butterfly

"....$316/ month X 12 months = $3792/year....".

 

That's not a rate of return, unless I am mistaken. You don't know how many years he will be collecting the $3792. If it's for 20 years, rate of return would be 1.34%. In 20 years, he would collect approximately $76000.

 

Present value is calculated by multiplying the amount of each annuity payment by the interest rate between payments and the number of periods in the annuity. As an equation, it is: PV = PMT * [(1-(1+r)^-n)/r], in which PV = present value, PMT = payment amount, r = interest rate and n = number of periods.


"...Why is everyone a victim? Take personal responsibility for your life..."
0 Kudos
4,552 Views
0
Report
Honored Social Butterfly

https://www.thebalance.com โ€บ ... โ€บ Retirement Decisions โ€บ Before Retirement
https://money.cnn.com โ€บ 2016/12/22 โ€บ retirement โ€บ pension-lump-sum-an...
https://www.schwab.com โ€บ resource-center โ€บ insights โ€บ content โ€บ lump-su...
https://www.nerdwallet.com โ€บ blog โ€บ investing โ€บ lump-sum-annuity
https://www.fool.com โ€บ retirement โ€บ 2018/06/18 โ€บ lump-sum-or-annuity-h...

"...Why is everyone a victim? Take personal responsibility for your life..."
0 Kudos
4,642 Views
0
Report
cancel
Showing results forย 
Showย ย onlyย  | Search instead forย 
Did you mean:ย 
Users
Need to Know

NEW: AARP Games Tournament Tuesdays! This week, achieve a top score in Atari Asteroidsยฎ and you could win $100! Learn More.

AARP Games Tournament Tuesdays

More From AARP