No. of Recommendations: 6
Sounds like you are a federal employee with that 3% COLA in your defined benefit plan. $58,000 a year in pension benefits is a very nice annual salary. Why would you reduce that amount and thus the amount upon which the 3% COLA would be calculated to gain a small lump sum? Do you have other savings in a 401K , IRA, ROTH, etc? If you do then use those funds to invest for extra income or capital gains. As to where to put those funds, how about a SP500 Index fund at Vanguard or a basket of solid stocks like Proctor and Gamble, Exxon, GE, Microsoft, Pfizer. They will provide solid, relatively worry-free growth and a decent dividend stream for the rest of your life. Here's another point: Financial planners will often suggest that retirees have 40% or more of their investments in bonds to guaranteee an income stream. You don't need to do that because your pension will be there year in and year out to provide that income stream. Because of the certainty of your pension it is like having a one million dollar investment that is throughing off 5.8% guaranteed interest a year. Congratulations on your good fortune! You seem not to have money worries, so go do something you've been postponing for the last 30 years.
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