Know of any pulling the plug soon before they start working for free?
51 replies (most recent on top)
@2hje True, you do have that surviving spouse option. Unless you have a trophy spouse, though, it's not likely your spouse is going to outlive you for long (studies show surviving spouses typically pass within five years). At that point, your heirs or favorite charities get nothing.
Not true on the annuity if you die. You have the option to take less and choose 100% spouse survivorship. Having said that, my lump sum combined with the 401K are doing great.
When I talked to Fidelity over 90% take the lump sum. Check the annuity, for some if you are taking the annuity and expire, then your spouse will get nothing. I guess if your dead you may not care at that point.
@2hgc. Hmmm. You can take the annuity and bet that you're going to outlive the lump sum. Or, you can take the lump sum, invest it while living off your 401(k), and bet you're going to out-return the annuity. You're right, do the math. That 90% (probably a conservative number) who take the lump sum must not be as smart as you!
The lump sum can be a poor choice relative to the annuity depending on your situation, for those that do the math and are capable of critical thought, which doesn't exist much on this site.
If you are 55 and up and are planning to take the lump sum, you would be wise to monitor interest rates to determine how much you are loosing by continuing to work. The rule of thumb is for every 1% increase in the weighted average segment interest rates, you can expect to loose 10% of the lump sum amount. And with the Fed determined to aggressively increase rates, it’s going get ugly.
EOI'd 2020. Best decision I ever made. A year of pay and COBRA coverage before I even had to think about anything. Oh, and great lump sum. I do feel bad for those who were 55-60 in 2020 and didn't take advantage of the great severance that was offered. It won't be repeated, and interest rates are only going up. Those of you who hired in after the pension calculation change in 2008 will never see anything remotely like what we got.
I’m out.quarter point was gonna cost me 50k. No brainer
Yes, heard about 1 employee today who is retiring because of interest rates
IRS segment rates surged for Feb but I expect an even bigger bump for March. Lump sum will start to shrivel. I know one person who just pulled the plug.
That’s why I pulled the plug last year. That, and a unexpected severance.