Q: Given a choice between a pension lump sum of $266,000 or $1600/month, which do you feel is the better choice? I am 63. Thank you.
A: This is something we talk with clients about all the time. There are a couple of things to consider when making this decision:
1. Is this a lifetime payout?
2. Are there any survivorship benefits?
3. What are your monthly income needs?
Generally speaking, however, a $1600 per month payment on a lump sum option of $266,000 is the equivalent of a 7.2% yield. These days, that is very good.
Hope this helps and please let us know if we can help in any way.