Retirement Crossroads: Lump Sum Vs. Pension And The Test That Helps You Decide | Wes Moss

If you're torn between choosing a lump sum payout and a monthly pension payment the 6% test can provide the clarity you need to make an informed choice! Wes Moss breaks down the math behind the 6% test with examples, how inflation impacts these payments, as well as what this decision means for your retirement.

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[dantheman]

I have a pension and almost everyone takes the lump sum to have control over their money and possibly leave it to their family if they didn’t spend it all

[krissycus]

Exactly what I was wondering- very clear and concise. Thanks!

[jiggeplaya]

I have this exact option in my company. Very useful information!

[pickandstrum]

Thanks I am retiring today and have been looking for this sort of information very helpful!

[cruisecrazy]

Thank you for this great video that explains the math and decision factors so clearly. My pension works out to 8% of the lump sum offer. I’m just worried because my company will be turning over the pension to a yet unnamed insurance company. Not sure how this will affect future pension payments, but I should be covered by the PBGC. Thanks again for sharing such valuable information.

[yourdailyblockchain]

Thanks for the vid - this helps. With today's calculation - looks like my pension % works out to about 10.9%

[ro]

mine works out to 7.9%. Half of my pension includes COLA. I have no heirs. I feel more comfortable doing the monthly I think, paying a tax bill on the lump makes me feel sick lol. What to do?

[landctrain]

Most important to remember is that when you die so does your pension (single life annuity) and when you have the lump sum you have something to pass on to heirs. Inflation eats up your monthly checks over the years and makes the money almost worthless after 10 plus years if you live that long.

[katman]

Take the lump sum, tomorrow isn't guaranteed 😮

[charliehargrave]

Lump sum always and invest in index mutual funds. after you die you want the money in your pocket not the companies pocket.

[Sky]

Take the monthly and stiff your wife? If I want my wife to get my pension money the monthly payment is much less

[RichardRietdijk]

if you die one month into retirement, your heirs either get that lump sum.. or 0.

[HungNguyen-sedn]

Lump sum will face immediately high taxes for the year. Pension will spread the taxes out on nany years. Do what is the best for your particularly situation. 😂🎉

[tessncali]

How do you compute accounting for taxes? Meaning, do you use the lump sum amount computation with and AFTER TAX amount? Or before? Thank you!