This week, Craig Siminski, of CMS Retirement Income Planning, shares an article discussing the key factors to consider if offered an option to take a lump sum in lieu of a pension:
Traditional pensions, which promise lifetime income payments in retirement, have become less common in the private sector, with only about 10% of workers currently participating in a traditional pension plan.
However, pensions are still widely offered in federal, state, and local government employment, and 61% of workers expect a pension to be a major or minor source of retirement income.
About half of pension plan participants can choose to take their money in a lump sum when they retire.2 In addition, companies may offer pension buyouts to vested former employees who are working elsewhere, and even to retirees who are already receiving pension payments.
By shrinking the size of a pension plan, the company can reduce the associated risks and costs, and limit the impact of future retirement obligations on current financial performance. However…
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Craig Siminski is a CERTIFIED FINANCIAL PLANNER™ professional, with more than 22 years of experience. His goal is to provide families, business owners, and their employees with assistance in building their financial freedom.
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