Q: Your thoughts – I am one of those GM retirees that is being offered a lump sum payment instead of continued monthly retirement payments through Prudential. My question: is it too risky for me to take the lump sum since I took early retirement? I am 57 years old and have been employed on and off since taking early retirement in 2009 and need that check to make ends meet.
A: We have been confronted a lot on the GM pension issue. The problem with the answer is that every person’s situation is completely different and likely warrants a specific answer. I would suggest you sit down with an advisor to help you understand all of the factors that go into making this decision. That being said, we have seen that in MOST cases with the buyout, if a retiree actually DEPENDS on the income that they are getting from the pension, it is likely that it makes sense to continue receiving the income in lieu of a one-time, lump sum. Again, much of this decision depends on health, other income sources, long term goals and objectives with your money, risk tolerance, etc.
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