This may be a valuable option if you are invested in a state pension plan!
Some retirees are looking for more flexibility and freedom in their retirement by taking out a portion of their pension funds as soon as they enter retirement. As part of higher education, K-12, and government pension plans, participants can typically choose to get a one time lump-sum distribution in addition to their monthly benefit.In Ohio, this is known as a Partial Lump Sum Option Plan (PLOP) payment and is available at retirement with certain eligibility requirements. But should you take it, and if so, how much? Even though this will reduce your monthly retirement benefit, that doesn’t mean you should steer clear of this option.
Some people are fearful of taking a lump sum payment because they worry it will reduce their future income. However, careful analysis can reveal to you what your financial options are with a variety of scenarios. At Affluent Capital Management, our advisors' primary goal is for each client to live the one life they have with confidence while enjoying their lifestyle spending goals. To achieve that, we measure investment performance based on dollars of future wealth. This is because we believe it is the only reliable way to balance the lump-sum and lifetime income options decision. This process will help you overcome the fear of taking money out of your pension fund and having personal control over more of your retirement assets.
How do you know if a lump sum option is right for you?
On the other hand, some people may not want to be on a fixed income and prefer to withdraw retirement funds immediately upon eligibility. By taking a one-time payment, you have more freedom in retirement to do the things you want to do. And this is also a way to not sacrifice your lifestyle. For either case, our advisors will run several cash flow simulations to help our clients answer their questions about lump sump vs. lifetime income options. Using probability analysis, we can balance your life expectancy with other sources of income and spending goals, and do it in concert with many possible investment strategies.
This process is highly personalized and is designed to give you a high level of confidence for meeting your future cash flow needs. If this sounds new and interesting, please feel to contact us at Affluent Capital Management for a free, no obligation Stress Test of your retirement plan. We look forward to walking you through the benefit options, requirements, and impact of using your Partial Lump Sum Option benefit.
CONTACT USto set up a complimentary consultation to discuss any questions you may have. We’ll help you get your finances in order so you can focus on your life.
Live the one life you have with confidence.
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