Here’s a reminder: the federal government requires that private-sector employers use a standardized mortality table and a corporate bond rate assumption. Using the standard assumptions and calculation methods (actual offers will vary slightly), his employer has offered him a lump sum payout of $13,613. The employer’s lump sum payout offer is a better deal for him. As I explained in my prior article, lump sum calculations are based on age-65 benefits. In the case of a GE worker otherwise eligible to begin benefits at age 60 without reduction, forgoing that to take a lump sum can amount to giving up 30% of your benefit value merely for the advantage of having a lump sum.

Source: Forbes November 04, 2019 04:18 UTC