Larry McClanahan, Financial Advisor
Defined Benefit (DB) pension plans have gone the way of the dinosaur, so you’re one of the fortunate folks. It’s good that you’re asking questions about it. However, nobody should tell you what direction to take without first understanding your situation. And there are many factors to consider, such as:
- What's your age and how many years to retirement?
- Do you have good health and longevity in the family genes? (lifetime payout can be a good thing)
- How much of a benefit are we talking about and how do the different options compare with each other?
- What are your financial needs now and into retirement?
- Are you knowledgeable about investing or is it better that your funds be professionally managed (in pension pool or adviser managing rollover IRA)?
- How solvent or underfunded is the pension pool that’s making you this offer?
- How do these options “mesh” (or not) with your other retirement resources?
If this is a small benefit, maybe it won’t make much of a dent one choice over another. But if it’s significant, you definitely owe it to yourself to engage a (genuine) financial planner to analyze your options in light of your broader financial picture and provide some advice. I hope that helps.
Dmitriy Fomichenko, President, Sense Financial
Roll it over into Checkbook IRA.
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