Financial Mistake: Not weighing your pension options early and considering all alternatives.
Weighing Your Pension Options
Pensions* are similar to an Immediate Annuity. An Immediate Annuity is Traditional Annuitization of money (see link to Traditional Annuitization). This is an irrevocable decision to convert a lump sum of money turn into on an income stream (either for your life, your spouse, or both). Annuitization is typically an irrevocable decision. We feel that alternative options offering lifetime income with greater flexibility are usually more desirable than traditional annuitization.
Although a pension is not always backed by an insurance company, choosing a pension election is usually very similar to electing an immediate annuity. When considering pension election options, depending on the option that you select, there may be no residual benefit to your beneficiaries. Pension decisions to elect a life-time income are typically irrevocable. However, some pensions offer the option of taking a lump sum distribution in lieu of an income stream. With this option, you could possibly:
Find out your options before you make your pension elections.
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*We are not securities licensed and we do not give securities advice. We ever recommend the sale or liquidation of securities. Any decision to liquidate securities is your own decision. **We are not tax advisors and do not give tax advice. Consult your tax advisor.