I guy calls into a Sunday morning financial advice talk show.
He says he is 62 and planning to retire in December. He wife is already retired and receiving a NYC teachers pension (amount not stated).
His pension will be $40-45,000 a year he says, but he can take a $800,000 lump sum as an alternative.
He has $1,000,000 in his 401k and another million in non-retirement funds in CDs kicking off “about” $40,000 in annual interest he says.
Here is his “problem.” Should he take the $800,000 lump sum and roll it over to an IRA? He says they live on $40-$45,000 a year and he is afraid that if he takes his pension it will put him on a higher tax bracket.
What a problem to have.
If he is worried about taxes now wait until he hits the required minimum distribution ten years from now. Not to mention the likelihood of higher tax rates. 😱
With all that cash in hand, I say take the annuity pension.