Created: July 2, 2020
Modified: September 9, 2022

Episode 6: Should I Take a Lump Sum Pension?

Thank you for joining me for Episode 6 of my NEW Money Wisdom Question Series, where I film answers to common financial and retirement investment questions in 2 minutes or less. Today I want to talk about receiving a pension and the options for taking the payment.

Traditional Pension:

A traditional pension is when you take the guaranteed stream of payments from your company when you retire. You get guaranteed monthly checks for as long as you live or you can put a spouse on there, so it’s guaranteed for both you and your spouse. That’s the advantage; guaranteed for as long as you live – you can’t outlive the pension. The disadvantages are that you lose flexibility and control.

Rolling Your Pension Money to an IRA:

You can take the money and roll it over to an individual retirement account (IRA). First of all, that’s a tax-free rollover. It doesn’t trigger any taxes. What happens now is, you can decide how much you want your monthly payments to be. You can stop and start them. You can increase them over time to protect against inflation. Also, you can take chunks of money out from time to time while maintaining monthly payments to take a trip, to buy a gift, or pay for a grandchild’s college education. You bear the investment risk if you do that, but what you gain is flexibility and control over the money.  

In Conclusion…

Everybody’s situation is different, so get some professional advice on that, but make sure you investigate all the possibilities for your situation. Thanks for joining me and I hope you found this information helpful! P.S. If you enjoyed this topic and want to learn more, get our free retirement book, “The Lump Sum Pension Payment Guide“. P.P.S. Feel free to submit questions here for a chance to have them answered!
  • Sandy and Thomas C.
    Sandy & Thomas C. are clients of Johnson Brunetti and received no compensation for their statement.

    “We always felt our financial needs were in very capable hands. Alex Angst is great to work with. Our advisor always made us feel he had our best interests at heart and explained things so we could understand them.”

  • Robert G.
    Robert G. is a client of Johnson Brunetti and received no compensation for his statement.

    “We’ve been clients of Johnson-Brunetti for > 10 years. We’re enjoying a comfortable retirement as a result. Many thanks to Joel and our CFP, Eric Hogarth. I wish we had plugged into this decade approach back when we were in our 30s.”

  • Lisa D.
    Lisa D. is a client of Johnson Brunetti and received no compensation for her statement.

    “Working with Johnson Brunetti has had a positive impact on my life by providing me with the knowledge, confidence, and peace of mind to move forward with my retirement plans. The process of getting to this point, through their guidance, has been informative and pleasurable.”

  • Ken D.
    Ken D. is a client of Johnson Brunetti and received no compensation for his statement.

    “I view your company as one that puts my interests first. I think that is very uncommon and very refreshing. “

  • Jeanne P.
    Jeanne P. is a client of Johnson Brunetti and received no compensation for her statement.

    “Matt does an awesome job! So easy to understand and he listens to our concerns and addresses them! happy I chose your firm!”

  • Anonymous
    This testimonial was provided by a client of Johnson Brunetti and received no compensation for their statement.

    “I have been pleased with the help and service I have received from the company. I have met several team members on Eric’s team and have found all of them very well prepared to meet with me when reviewing my portfolio. I always feel that I am an important customer and appreciate that very much. I hope the firm continues to focus on the customer and maintains its great service. I think you do a great job for someone like me!!!! I’m happy I chose your firm!”

    Johnson Brunetti
    Welcome to Our New Website!
    Everything was designed with you in mind, making our retirement planning resources more easily accessible to you.
    Check out your new resource center, where everything can be organized by article type or topic
    Are you ready to speak with a financial advisor?
    Johnson Brunetti

    Investment Advisory Services offered through JB Capital, LLC.
    Insurance Products offered through JN Financial, LLC.
    Atlanta • Boston • Hartford | Tel: 800-208-7233

    JB Capital LLC is a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply any level of skill or training. Information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.

    JB Capital's Form ADV | Disclaimer | Privacy Notice | Client Relationship Summary

    *Information about our Affiliation with the UConn Huskies

    Johnson Brunetti is a sponsor of WFSB Better Money, WCVB Better Money Boston, WSB-TV Better Money Atlanta, WTNH Money Wisdom, and WTIC Money Wisdom.