Two determining factors in taking the lump sum or lifetime pension


You’ve been offered an option to take a pension from your employer. If you accept it, you can take the lump sum or take a monthly pension payment for your remaining lifetime. Decker Retirement Panning, Inc. recommends looking at two factors when deciding.


Survivability means that you can take more monthly income if the income stops when you die, OR you can draw less if it is spread over the lives of you and your spouse. Mathematically, two lives will receive more than one. One-hundred percent survivability is suggested unless one spouse has very poor health.

Income and Risk

You are facing a choice of getting $100K today or a lifetime of payments at $521/month or $6,250 per year. Here are three reasons Deck Retirement recommends to take the lump sum:

1. Taking a lump sum allows a 16-year head start on portfolio returns that monthly payments would never catch. Never. Portfolio returns is the first reason to take a lump sum.

2. The second reason is company risk. Will the company be around for 40 years to pay you? Pan AM, Boeing and GE and JC Penny are all examples of a company failing to deliver it’s pension payments.

3. The third reason to take a lump sum is estate risk. If a married couple were to pass away unexpectedly, you’d the lump sum is kept in the estate and is passed on to the children. Pension payments will stop if you and your companion are gone.

The retirement process is difficult. For help on these decisions from an advisor and more, visit Decker Retirement Planning, Inc. at or call 833.717.3030.

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