• Weighing Your Pension Options

  • 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:

    1. Take a lump sum distribution, which could be fully or partially taxable**.
    2. Transfer the lump sum into an IRA with no life income guarantees. Depending on how much you
        with-draw annually, you could run out of money.
    3. If you are needing an income now, you could transfer the money to a highly rated insurance
        company that could provide you higher or better an income for life options. A Future Benefits
        agent can shop amongst numerous highly rated insurance companies for products offering a more
        competitive income, more flexibility, or additional enhanced benefits.
    4. If you are not needing the money immediately, you could transfer your lump sum to an IRA fixed
       indexed annuity with guaranteed growth of an income account value used to calculate a future income
       guaranteed for life (See link to Guaranteed Growth and Lifetime Withdrawal Basics). By waiting a few
       years to turn on an income, you might have a considerably higher lifetime check.



    Find out your options before you make your pension elections. 

    Click here for a complementary no obligation financial review with a Future Benefits Agent

    Or call us at 901-754-2040

    *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.

    See our Professional Disclaimer