The pension policy is a really confusing one. With many companies coming forward to offer lump-sum pensions, you need to weigh the options before deciding on the payment options you prefer.
Have you been targeted by companies to take pensions in lump-sum payments rather than getting it as monthly payments for your lifetime? There are many companies now offering former employees and their retirees the option of taking their pension as a big sum after retirements. This is now a common case seen with private firms.
More than one third of the retired employees who are under the pension n scheme did take a lump-sum amount from their private employer when they retired from work or left the service voluntarily. This is a survey report for the year 2013 that was conducted by the Employee Benefit Research Institute. But still, there are many employees who are still in the dilemma as to choose which kind of pension plan after retirement.
Many people who had taken the lump-sum payment after retiring from their services are seeing that the bulk amount is a reduced retirement asset when compared to monthly retirement pension payment. This is a Report that has been compiled by the Government Accountability Office. Many retirees who get bulk retirement payout are not sure as to how the companies arrive at a figure and what kind of calculation is done to fix the retirement payouts.
All these confusions have led to the Consumer Financial Protection Bureau to come out with a guide to help the pensioners the ideas to compare the benefits and the risks involved when accepting one time full settlement pension payouts or getting a monthly pension. You can Click on this Post ‘Different Types of Pension Plans in the USA’ to gather information on the available pension plans.
The findings suggest that it is always better to opt for a monthly pension payment system if you and your spouse are in good health and if your family members might lead a long life. By doing so, you will not be running out of money in your entire life. You will know at the back of your mind that your pension amount is so much and hence spend accordingly.
The offer of a lump-sum pension is always a tempting one and you would feel like you have won a jackpot. But, if you do not have control of your spending or invest in a losing business, then you might find yourself getting bankrupt. Hence, it is better for retirees’ to look for a guaranteed retirement fund every month. If you are a shrewd investor and can afford to lose some of your retirement amount, then you can very well go for a full settlement of your retirement pension while retiring.
If you have poor health or suffer from an illness that will shorten your longevity, then it is always better to opt for a lump-sum pension payment.
Even though many experts and analysts advise retirees to opt for a monthly pension, the decision has to be made by the individual depending on various factors. He or she will have to think about family history of longevity, age, health conditions, money management skills, etc., to make up a decision on which retirement pension to choose.