Should I Take My Defined Benefit Pension As A Lump Sum Or Annuity?

by | Jan 10, 2023 | Spousal IRA | 15 comments

Should I Take My Defined Benefit Pension As A Lump Sum Or Annuity?




TJ has a defined benefit pension plan that he can take as a lump sum or annuity. Wes helps TJ crunch the numbers and find the best path for retirement.

Original airdate: April 30, 2017 – Hour 2, Call 1.

Wes Moss is the host of MONEY MATTERS – the country’s longest-running live call-in, investment and personal finance radio show – on News 95-5FM and AM 750 WSB.

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Please note, this information is provided to you as a resource for informational purposes only and should not be viewed as investment advice or recommendations. Investing involves risk, including the possible loss of principal. There is no guarantee offered that investment return, yield, or performance will be achieved. There will be periods of performance fluctuations, including periods of negative returns. Past performance is not indicative of future results when considering any investment vehicle. This information is being presented without consideration of the investment objectives, risk tolerance, or financial circumstances of any specific investor and might not be suitable for all investors. This information is not intended to, and should not, form a primary basis for any investment decision that you may make. Always consult your own legal, tax, or investment advisor before making any investment/tax/estate/financial planning considerations or decisions….(read more)


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15 Comments

  1. Patrick Ring

    The six percent test ignores your survival probability. Here is link to my video which includes survival probability into the analysis: https://youtu.be/1sYDwzPcp9U

  2. Danny Hudson

    Hoarding money is an addiction, every option is ok no need to worry about the pennies

  3. M. Campbell

    The 6% test is very helpful.

  4. joe blow

    will the trustee to trustee pension rollover exceed the $7.000max I R A contribution for 12 months

  5. joe blow

    will the trustee to trustee pension rollover exceed the $7.000max I R A contribution for 12 months

  6. joe blow

    will the trustee to trustee pension rollover exceed the $7.000max I R A contribution for 12 months

  7. joe blow

    will the trustee to trustee pension rollover exceed the $7.000max I R A contribution for 12 months

  8. Steph Traveler

    Great advice and shorthand math trick. Mine only returns 4% give or take. But, I'm significantly younger. ie. starting age for annuity. guess I'm taking the lump sum.

  9. jack masden

    This man has millions and he can't seem to figure out what to do with 138,000?

  10. Virel360

    Solid advice. No money reserve take the lump sum. Already have a war chest then take the annuity and count it as further diversification.

  11. Ted Sterrett

    I've been offered a lump sum or an annuity and the company that I work for is pushing me towards taking the lump sum by manipulating the numbers based on my age and tax status as it relates to the amount that I will receive. I don't have any liquid assets like the gentleman you spoke with, so I think I should take the lump sum and invest! Yes Mr. Moss I do want to retire sooner rather than later, life is too short to continue to make others rich now it's my turn. I'll be the first in my family to be able to retire, the rest of my family is either dead or dead broke!!!

  12. Marc P

    Take the annuity excellent return.

  13. Raj Beekie

    It all depends on other assets the man has. If the man has limited wealth then the annuity is the way to go. This man has other income streams that can withstand a market shock.
    In this man's case, it seems it is best to take the lump sum. When he and his wife die the lump sum balance is there to pass on to the kids and grandkids. The annuity option leaves nothing.

  14. Big Red

    Take the lump sum and stick in your checking , you have enough in investments and both are going to be collecting SS

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