Pension lump sum payment
October 18, 2013 5:45 PM Subscribe
I have the opportunity to take a retirement plan lump sum …
posted by anonymous to work & money (11 answers total)
and I want to know if it would it be better to take the lump sum and invest it or wait for the monthly payment. It is from Honeywell Corporation. I am 52 and in good health. Those life expectancy things on the internet say I'll live to be 80, which sounds about right.The lump sum is $15,231. The monthly amount would be $198.33 (for lifetime, no beneficiary) starting on 10/1/2026. I would be 80 in 9/2041, so let's say that's 15 years of monthly payments and then I die. So 15 x 12 x 198.33 = $44624.55. The lump sum can be tax-deferred and I would add it to my existing Prudential mutual fund. So I think the question is can I turn (in round numbers) $15k into 44k in 13 years. Is my thinking correct? What else can you tell me?
This is obviously just a small part of a retirement plan, but I would nonetheless like to maximize it.