No. of Recommendations: 1
Author: lyates1 Date: 12/30/03 2:40 PM Number: 38306
I have a pension plan from an old employer and I'm wondering if I should keep it in place (Wachovia) or should I cash it out and invest those funds in an IRA (traditional).
I'm 52 and hope to retire at 65.
Please let me know what I should be considering here...


I just went through this myself. I really like the security of pension income for life, but the thought of inflation cutting the value of the payments by 2/3 by the time I die was the stumbling block.

I finally opted for the lump sum, partly because of http://www.webannuities.com . If I ever decide I really want the pension after all, I'll just make my own pension with an immediate annuity. I compared the payments with what I would have gotten via my company pension, and they were almost identical. Also, by making an immediate annuity, I can make it for whatever amount I want; ie, only a portion of my lump sum if I want to.

One thing that still bothers me is the liability risk difference between a pension and a lump sum. In the event of a law suit, it would seem to me that the pension income would be less vulnerable than the lump sum.

Russ
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