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Take pension lump sum?
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Re: Take pension lump sum?
"....$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.
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Re: Take pension lump sum?
$316/ month X 12 months = $3792/year
3792/67000 = 0.05659701492537 rounded to 5.65%
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Re: Take pension lump sum?
"..... Even though it is the lowest monthly amount, it is still paying 5.65%...".
How are you calculating a return of 5.65%?
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Re: Take pension lump sum?
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.
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Re: Take pension lump sum?
"...Why is everyone a victim? Take personal responsibility for your life..."
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Take pension lump sum?
Thanks for your responses. Original post deleted by author.
This AARP gamer plays to get back her art and identity after a health scare. Read Regan C.’s story, available now.

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