×
☰

IMQ Application # 28: Get Pension Lump Sum Now before Interest Rates Rise

February 11, 2022 11:22 am Published by Leave your thoughts

 

For your clients with pensions, have you recommended some forgo the monthly annuity benefits for a lump sum that can be rolled over into a diversified portfolio?

For example:

George has been with his company 21 years and has a pension with a lump sum value of $600,000. Low interest rates increase the lump sum value of a participant’s pension. Depending on what discount factor his company uses in setting the lump sum value of his pension, he may work another 4 years, but the pension may only slightly rise in lump sum value because the U.S. Federal Agencies has just announced a future rise in interest rates.

As long as George has passed his company’s age limit for early retirement (usually age 55), an In Marriage QDRO allows him to get a lump sum valuation based on current interest rates and roll up to 100% of that lump sum value to an IRA in his wife’s name, while still collecting another few years of pension credits during his remaining employment.

Categorised in:

This post was written by Marcus Foote

Leave a Reply

Your email address will not be published. Required fields are marked *

What’s in it for You?

401(k) Plans, Corporate Pension Plans, Profit Sharing Plans and State-Deferred Compensation Plans

A tool previously associated with divorcing spouses works for married couples, allowing them unrestricted access to retirement benefits without penalty. Unrestricted, non-penalized access offers more effective estate planning and protection opportunities for those who serve married clients.

LEARN MORE

Have Questions?

Use the form to the right to get in touch with us via email and we will do our best to respond to you within 24 hours.