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Investing/Strategies / Retirement Investing
|Subject: Re: Pension info to consider||Date: 10/5/2012 9:07 AM|
|Author: Hawkwin||Number: 71004 of 74505|
As someone who has been investing for 40-some years, I would be all over the lump sum payout.
Starting at 47 and using 65 for an end point:
At 6% annual return, the $35K would be $254,430. Using a 4% withdrawal rate would give you $915 per month. Payments could slightly increase each year to $1,085 at 70.
At 4% annual return, the $35K would be $199,131. Using a 4% withdrawal rate would give you $707 per month.
Your math is terribly incorrect.
6% compound on $35k for 18 years (65-47) is $99,901 (compounded annually). I have no idea how you got to $254,000 but that would be a rate of nearly 12% a year. Take 4% of that a year and you are looking at $333 a month, half of what they would get in their pension.
4% compound would only be $71,000.
I'll run a more detailed analysis of the options presented later (unless someone else beats me to it) but I had to respond to this gross over estimate before I started my day.
As someone who has been investing for 40-some years,
I mean no disrespect but when you use your previous experience to add weight to your opinion, you should really do a better job in the results. A simple eyeballing of the numbers and using the Rule of 72 and I immediately knew something was wrong with your math.
Compound interest calc:
Measure twice, cut once:
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