I had a friend who passed away recently who was an exxon retiree. Their family lived into their nineties so he expected to live until at least 85. My friend retired at 61 with 40 years of service and chose the annuity. The annuity was huge and paid them nearly 50 percent of his yearly pay. The retiree expected to live at least 25 years and collect the pension but it was not the case. They only received 6 years pay from the annuity and had no relatives to leave as beneficiaries. If they would have taken the lump sum it could have been left to anyone as beneficiaries. Alight only allows spouses and children to be beneficiaries for the pension. He could have left the lump sum money to his nieces and nephews, friends or even a charity. He was in excellent health and would have lived to an old age but pancreatic cancer took him out. From the time of diagnosis to death was 5 months. Exxon and alight won. Don't make the same mistake as my old friend.
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Personal decision and circumstances. Pension is a good choice for those who already have enough, but want an isolated guaranteed income stream for a specific reason. You do your own math
Sad to hear that, knowing the people used to live longer than the people of today., but who knows about the Century disease. Just a wrong decision or judgement like everyday life. If the people can predict the future, they will talk like the imbeciles that throwing cr-p about your friend with cancer.
He was lucky to make it to retirement with those poor projection abilities. Should’ve been pipd during the Clinton administration.
It’s not a ripoff, it’s your decision. Personally I can’t see how the annuity is better, living to 90+ is never guaranteed
It's not a rip off. There are trade-offs between taking lump sum versus annuity and you make your own personal decision based on your own circumstances. If you think of the opposite scenario say the person lives until he is 105 years old then he would be better off,with guatanteed certainty of not running out of money.
Always take the lump sum and roll it into an IRA. An independent financial advisor can invest the lump sum through Charles Schwab and you will receive a 10-15% return on your investment at today's interest rates.
Maybe the exception, old timer that mentored me, yes they used to do this, lived to 100 , beat the He-l out of them on his annuity, WW2 vet
Yep - all retirement annuities are a bet on how long you will live. It’s a roll of the dice
A similar situation happened to a shell college of mine. Shell does not allow a lump sum only annuity. They died 5 years after retirement without a related beneficiary to share it with. He died suddenly of a heart attack but was recently cleared by his cardiologist. You never know when your time will come so live it up while you can.