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URL:  http://boards.fool.com/a-few-thoughts-if-offered-a-payment-at-an-early-29185575.aspx

Subject:  Re: Lump Sum vs Pension Annuity Date:  3/21/2011  1:39 PM
Author:  pauleckler Number:  68669 of 76418

A few thoughts--

If offered a payment at an early age, say 55 your first consideration should be, if you wait to age 65, how long must you live to recover all the funds you would have collected between age 55 and 65. Then how is your health and in your family genes? What are the odds you will live that long or say to age 90?

What are the tax implications if you begin collecting at age 55? Will you continue working? Retire? Consider the whole plan.

If you retire early, will you be covered by employer health insurance? And what are the rates?

With a defined benefit pension plan, the lump sum value is calculated based on the pension benefits at age 65. When interest rates are low, the lump sum value is higher than when interest rates are higher. That implies that now is an especially opportune time to take a lump sum.
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