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Subject:  Re: Pension - lump sum or annuity? Date:  4/26/2014  2:51 PM
Author:  BlueGrits Number:  74879 of 100451

Hawkin is right -- we looked at the term life policy for me as well, but to make a long story short it wasn't necessary for our situation given the savings we'd already accumulated and DW's job (and ability to get future jobs). What we *did* do was take out a ten-year term policy on her life ($250K, cost about $270/yr) as she became the primary breadwinner.

Some people will tell you "Oh, but if you can get the money right away, you can invest it and it'll grow." That's true -- but if they've already discounted your lump sum at a rate of 10%/yr you'll have to earn that rate just to get back to what the company would have originally given you at full retirement. Some folks are confident in being able to do that, but others aren't.

Make your decision carefully because, as I said before, it is truly a major life decision. Keep in mind your current and future needs for income (before and after retirement), trust in the company to make good on its promises, how good your investment skills are, etc. Good luck!
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