gray dock during daytime

Making the lump-sum payment might be beneficial to some workers and retirees in certain cases. For people with large amounts of debt (credit cards, mortgages, etc.) entering retirement, using the lump sum to pay these off and reduce their risk to interest rate fluctuations in the future. By paying off the debt as soon as possible they could eliminate future payments that would require working into retirement or using other income sources such as social security to pay for. This would be especially beneficial for retirees who have a large portfolio of assets as the payments would be a drag on returns in their portfolio.

"By paying off the debt as soon as possible they could eliminate future payments that would require working into retirement or using other income sources such as social security to pay for.." lake near trees across mountain

Also, those who get a lump-sum payment could maintain a tax protection by rolling it over to an IRA. If invested properly and not drawn down upon significantly early in retirement, a retiree could end up being able to improve their standard of living and while being better prepared for unexpected healthcare expenses.

Retirekit CTA

Generally speaking, the lump-sum option is beneficial when you do not have to rely on it as a significant source of income early in retirement, or it is used to reduce or eliminate significant liabilities that would require a large income stream to payoff many years into retirement. Taking a lump-sum requires more discipline and planning, but if utilized correctly, could provide more benefit over the course of retirement and allow you to leave something behind to beneficiaries.

 

For more information about this topic, view our e-book here: https://retirekit.theretirementgroup.com/pension-lump-sum-payment-windows-are-back-e-brochure


This information should not be construed as investment advice. Neither the named Representatives nor Broker/Dealer gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. The publisher is not engaged in rendering legal, accounting or other professional services. If other expert assistance is needed, the reader is advised to engage the services of a competent professional. Please consult your Financial Advisor for further information or call 800-900-5867.

The Retirement Group is not affiliated with nor endorsed by fidelity.com, netbenefits.fidelity.com, hewitt.com, resources.hewitt.com, access.att.com, ING Retirement, Alcatel-Lucent, AT&T, Apache Corporation, Altria, Avaya, Baker Hughes, Bayer, Boeing, BP, Bristol Myers Squibb, Chevron, Concho Resources, Hughes, fidelity.com, Wyeth, Northrop Grumman, Merck, Raytheon, Coca-Cola ,Qwest, Pfizer, Caterpillar, ConocoPhillips, ExxonMobil, Sempra Energy, San Diego Gas & Electric Company, Southern California Gas Company, Ameren, Anheuser-Busch, APL, Bank of America, Blackhawk Networks, Caterpillar, CenturyLink, Chevron, Citigroup, Clorox, Coca-Cola, Colgate, Con Edison, ConocoPhillips, Dexone, ExxonMobil, GlaxoSmithKline, Halliburton, Hewlett Packard Home Depot, Honeywell, HP, IBD, Johnson Controls Kaiser Permanente, Kimberly-Clark, Kinder Morgan, Lockheed Martin, McCormick Spice, Merck, Monsanto, Northrop Grumman, Occidental Petroleum, Pepsi, Pfizer, PG&E, Phillips 66, Phillip Morris, Qwest, Raytheon, Royal Dutch Shell, Safeway, San Diego Gas & Electric, Schlumberger, Scotts Miracle Gro, Sempra, Siemens, SoCal Edison, Sony, Southern California Edison, Teradata, Toyota Motor Corporation, Tropicana, United Parcel Service, Verizon, We Energies Group, Wisconsin Energy, Wyeth, Verizon or by your employer. We are an independent financial advisory group that specializes in transition planning and lump sum distribution. Please call our office at 800-900-5867 if you have additional questions or need help in the retirement planning process.

The Retirement Group is a Registered Investment Advisor not affiliated with FSC Securities and may be reached at www.theretirementgroup.com.

TRG Retirement Guide

Tags: Financial Planning, Lump Sum, Pension, Retirement Planning