Cashing out a pension for immediate cash can be tempting but may not be wise, particularly for younger individuals. The article discusses a case where a 44-year-old can choose between a $24,000 lump sum or $100 per month for life. The break-even age for the given options is 64, suggesting that accepting the lump sum could jeopardize future financial security. However, if immediate financial needs warrant it, such as home buying, the lump sum may be beneficial. Ultimately, consulting with an advisor is recommended to help align decisions with long-term goals.
It's a tough decision for sure. But here's what I'd suggest the poster think about when making their call.
It's not a particularly common thing to be entitled to a pension...But some companies do offer them.
But here's what I'd suggest the poster think about when making their call.
If they're eligible for $100 a month, it will take them 20 years to collect $24,000 in pension income.
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