Lump sum vs monthly benefit and life expectancy

[Anonymous]

Are people (men in particular) overly optimistic about their life expectancy once they retire?

If most men retire at 65 and most die before 82, then why do so many opt for monthly benefit as opposed to lump sum which could be rolled over into an IRA?

[Anonymous]

Health is often missing in retirement planning. Men especially just focus on savings aggressively for retirement while not investing enough in their own health. The published life expectancy for men I don't think is correct. I don't know it seems to me that a lot of us are dead by 80. And if we are alive by then, the number of health issues we have is enormous.

Guys exercise, eat healthy, reduce stress, cut alcohol, travel, spend time with friends, pay attention to your mental health. Sure your offsprings will be happy to know that you will leave them millions. But YOU did the hard work so YOU need to enjoy that fruit of your labor first. What's the point of a $5 million portfolio at 65 if you look 80 at 65 and in poor health? Instead of enjoying that money a lot of your time will be spent with the medical and pharmaceutical industry.

[Anonymous]

I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

[Anonymous]

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Yes— everyone who manages to retire and take a lump sum during a huge bull market should follow this advice.

[Anonymous]

If you retire at 65 unless you are guaranteed to leave until you are 100, take the lump sum. But I think some of us have amnesia and think the past 5 years or so of market performance is going to be the norm.

[Anonymous]

A lot of pensions have a survivor's benefit. If my DH dies before me, I will receive his pension (exact same monthly amount) until I die (I think there's an upper limit on it but it's like 20 years and I think it's bigger if he dies before 65).

Also we have lots of money in 401ks and other investments. We view the pension as insurance against potential losses in the market. If the market took a big hit, we know we have guaranteed monthly income. Also, since our house will be paid off by the time we retire, the pension amount is actually pretty generous. Even if we had no other investments, we could live a reasonably comfortable life on it, eating out once a week and domestic travel a few times a year. Our other investments will afford us a more expansive retirement, but it is a relief to know that even if the worst happens, we'll be okay.

[Anonymous]

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Which non profit was paying that? My lump sum estimate for my lousy job after 10 years is $100k

[Anonymous]

Anonymous wrote:A lot of pensions have a survivor's benefit. If my DH dies before me, I will receive his pension (exact same monthly amount) until I die (I think there's an upper limit on it but it's like 20 years and I think it's bigger if he dies before 65).

Also we have lots of money in 401ks and other investments. We view the pension as insurance against potential losses in the market. If the market took a big hit, we know we have guaranteed monthly income. Also, since our house will be paid off by the time we retire, the pension amount is actually pretty generous. Even if we had no other investments, we could live a reasonably comfortable life on it, eating out once a week and domestic travel a few times a year. Our other investments will afford us a more expansive retirement, but it is a relief to know that even if the worst happens, we'll be okay.

If you are still married at retirement I think retirement planning is much easier. Unfortunately I am seeing a lot of people my age (we are in our early 60s) divorcing. And I just can't imagine the mess financially and also you now have to rethink your financial future at a time when you can't even work.

[Anonymous]

Anonymous wrote:Are people (men in particular) overly optimistic about their life expectancy once they retire?

If most men retire at 65 and most die before 82, then why do so many opt for monthly benefit as opposed to lump sum which could be rolled over into an IRA?

How long you live is luck, genes, taking care of yourself, and good medical care. But if you are a male alive at 65 -- the chances are very high you will exceed 80. To some degree look at you parents and how old they are or were when they died. Not a perfect predictor but then add in if you lived a different lifestyle and take into account the advances in medical care. More and more of us will live to 90 plus.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are people (men in particular) overly optimistic about their life expectancy once they retire?

If most men retire at 65 and most die before 82, then why do so many opt for monthly benefit as opposed to lump sum which could be rolled over into an IRA?

How long you live is luck, genes, taking care of yourself, and good medical care. But if you are a male alive at 65 -- the chances are very high you will exceed 80. To some degree look at you parents and how old they are or were when they died. Not a perfect predictor but then add in if you lived a different lifestyle and take into account the advances in medical care. More and more of us will live to 90 plus.

This! "Average lifespan" is different than what the actuarial tables say is likely for an individual man's lifespan if he's already lived to 65.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Yes— everyone who manages to retire and take a lump sum during a huge bull market should follow this advice.

Quite the opposite. Had they put the money into market when it was down in 2015, 2018, 2022, they would have a lot more money now.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Which non profit was paying that? My lump sum estimate for my lousy job after 10 years is $100k

Financial regulation non-profit.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Yes— everyone who manages to retire and take a lump sum during a huge bull market should follow this advice.

Quite the opposite. Had they put the money into market when it was down in 2015, 2018, 2022, they would have a lot more money now.

+1. You put that 1.1 M in 2008 at the height of the market crisis, and you would have 30M in 2025.

[Anonymous]

Most men do not make it to 80, so saying they are still alive at 65 is not accurate to assume they have another 15 years left. I know plenty of men who made it to 65 but not 75.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I left my non-profit job in 2020 at the age of 55 after spending 20 years there, and I decided to take a lump sum of 1.1M and rolled it over an investment IRA. I looked at it yesterday and the account is now 3.5M. Much better return than a monthly benefit check. YMMV.

Yes— everyone who manages to retire and take a lump sum during a huge bull market should follow this advice.

Quite the opposite. Had they put the money into market when it was down in 2015, 2018, 2022, they would have a lot more money now.

+1. You put that 1.1 M in 2008 at the height of the market crisis, and you would have 30M in 2025.

How?