Helping Clients Choose Annuities Or Lump Sums
April 17, 2014
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1) Since most defined benefit plans have unrealistic return assumptions (typically 8%), it is very unlikely that a realistic portfolio can be expected to outperform plan assumptions. 2) The key factor in the rollover decision is (consequently) the family's legacy objective--the rollover may provide one. 3) Two other key considerations: does the plan offer a cost of living adjustment and does the joint benefit step up at the death of the spouse to the single life benefit?