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Subject:  Re: Pension Maximization Question Date:  10/15/1999  10:19 AM
Author:  honda97 Number:  14569 of 102726

I would need more information to be more definite, but a Lump Sum Distribution of a FMV
 $600,000 pension would be taxed at about 26% with 5 year averaging, and a lower percentage if
 it is less $s and/or if you were a participant prior to 1974. The $30,000 pension might, along with
 other income and SS, put you into the 28% or even 31% tax bracket for these funds. You may
 prefer investing your own funds versus a fixed pension income, and leaving some of it to children
 as a pension will stop when both you and your spouse die, or just you die on a single life option. It
 is worth considering, at least.

I read your reply, but am unable to understand it.
I can't tell where the $600,000 pension comes from.
Is that what is behind the $30,000 Anuity payment my
wife would receive on my death?

I guess I am still unsure as to gamble on a sure
pension of 30k for my wife, (taking the joint annuitant
option) or instead use the 5K year delta (from the
single life option) and buy the VUL policy where the
projections (%10 annual growth) forecast that in 12
years, it should be paid up in full (longer if the
growth rate is less).

If the writer of the VUL policy goes bad, than my wife 
is exposed. Staying with the joint annuitant option of 
my pension has no real risk.

Also, from what I understand, when the VUL pays my
wife the lump sum, it than becomes part of the estate.
She would than have to buy an annuity that would
provide her with the $30/k yearly pension.  

If she dies first, than this policy would have some
cash value that I suppose would be available to me
probably with some penalties for early withdrawal.

I need to tell my company which option I want by mid-
November, so I still have some time to figure this all
out.  Thanks for your help...


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