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Author: okidog1 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75381  
Subject: Pension Plans - Should you sell out? Date: 3/20/2000 5:55 PM
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I currently receive 2833 per month in a pension plan which only pays me while I am alive.

Should I cash out and reinvest the money in hopes coming out ahead.

To receive 2833 per month at an 8% return you must have 425,000.

If I was to cash out where can I go to see what companies are willing to offer?

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Author: pauleckler Big funky green star, 20000 posts Top Favorite Fools Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 20313 of 75381
Subject: Re: Pension Plans - Should you sell out? Date: 3/20/2000 8:57 PM
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That pension plan payment you talk about is actually an annuity. If you are already collecting the benefit, it will be difficult to change.

In most cases when you leave a company and have a vested pension plan benefit, they will explain your options to you. In most cases, it is possible to collect a lumpsum distribution and roll that over to an IRA, which gives you the investment options you describe. Beyond a certain age and in some pension plans beyond a given number of years of service, you can begin collecting monthly payment before normal retirement age.

In making the choice between lump sum, early pension payments, or waiting, most people would consider their health, life expectancy, and likely returns you can get in other investments. Experienced investors usually feel they can do better taking the lumpsum payment, but it can be comforting having an insurance company take all the risks to make sure you get those checks every month. It depends on your willingness to take risks, and also on what other sources of income you have and so how important those pension payment are to supporting your anticipated lifestyle.

The details always depend on the rules of your pension plan. So best plan is ask your HR department to explain the choices to be made with your plan at various stages in your career with the company. Many companies offer retirement planning seminars to employees sometimes years before retirement to help you understand the choices.

Best of luck to you.

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