Cortburg Speaks Retirement

Early Retirement and Pension Buyouts

July 14, 2021 Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® Season 2021 Episode 41
Cortburg Speaks Retirement
Early Retirement and Pension Buyouts
Show Notes Transcript

Cortburg Speaks Retirement - episode #41: Are Early Retirement and Pension Buyout Offers a Good Deal for You? / Investment in Stock Market, Financial Planning, Retirement Planning, Money Management

On this episode, Miguel Gonzalez will help you answer the questions “Are Early Retirement and Pension Buyout Offers a Good Deal for You?”

INTRODUCTION

Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 

HOST

Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   

On this episode, I will help you answer the questions “Are Early Retirement and Pension Buyout Offers a Good Deal for You?”

In today’s economy, offers of an early retirement buyout for a current employee or a pension buyout directed at a former employee are becoming common as companies look for ways to cut costs. Many large employers are offering employees who are not yet at retirement age the option to take an early retirement buyout.

For companies that had a pension plan for their employees, pension buyout offers have become standard practice due to the increasing costs of administering pension plans. Even though pension plans may not be currently part of the employer’s retirement plan, there may be former employees that have the pension plan. Companies have a desire to get the liabilities associated with the pension payments for retired employees off their balance sheets well ahead of their retirement start dates.

Both of these types of offers usually come with several options:

· Take the value of your early retirement or pension buyout as a lump-sum payment which can be rolled over to an IRA. The advantage is the ability to manage this money outside the employer’s plan, perhaps growing the value to a level that would provide a more significant benefit than taking your payments every month.

· Take a monthly payout now (earlier than your average retirement age) with tax consequences.

· Do nothing and take your original pension payment (or a lump-sum if offered) at your planned retirement age.

Factors to consider:

· Will taking one of the buyout options put you in a better financial position than doing nothing and waiting until your normal retirement age?

· Are you comfortable managing a lump-sum yourself or do you prefer a financial professional you trust to help?

· Is your financial or health situation such that taking the monthly payments now would make sense?

With companies experiencing an unknown financial future due to COVID-19, the tariff environment, and the worldwide economy, buyouts may continue for some time. If you receive an early retirement or pension buyout offer, meet with your financial professional to help you evaluate your offer and make the appropriate choice for your personal situation.

Make sure to visit our website, www.CortburgRetirement.com. Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Retirement Specialist and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.  

 

DISCLOSURES  

Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.