conversation: User (galloping-gaylord): "So I've been working for the same company for 17 years. I'm 40 years old, non-smoker and married with kids. \n\nAt age 65 my pension will pay $4800/mo until death. \n\nI've just been offered a one-time lump sum of $223k in lieu of any future benefits. \n\nShould I take it /r/personalfinance? \n"
  Self: "Pension actuary here. First glance, don't take the lump sum. We're at a point in human history where people are projected to live longer than ever before. With that lump sum, are you sure you will be able to manage it properly yourself (or find someone who will who will not charge you exhorbitant fees) to provide steady income for the duration of your lifetime? That might be longer than you can prepare for. And remember, annuities are not cheap, insurance companies need have to make money too. But that being said, I agree with a few of the other comments, find out how funded your company's pension plan is. If they are able to offer you a lump sum, they are likely doing ok, at least 60% funded. Check your annual funding notice, you should be getting one by the end of this month, this will tell you what percent funded the plan is. If it is above 80% funded, your plan is ok good shape and you should lean toward not taking the lump sum. If your company goes down, the PBGC will take over benefit payments but you would receive a reduced benefit. They are probably offering you this lump sum now because they would like to shrink their liability and administrative fees associated with your benefit. They are looking out for their own interests, obviously, so be careful of what you decide. So I vote no, keep the lifetime benefit."
  079855432 (079855432): "Cheers fellow pension actuary!  Your response should be higher since it's one of the few that isn't based on anecdotal or second hand understandings of how pension plans work.  "
  Not_a_Mainer (Not_a_Mainer): "Yeah, but their response is based on generalized assumptions about the OP's pension plan....that is just as bad as anecdotal/second hand advice isn't it?"
  079855432 (079855432): "I don't think so, but I can see your point.  95% of the response isn't based on assumptions of the OP's plan, it's the truth of all US qualified DB plans.  hostessw_themostess offers an opinion that "if it is above 80% funded, your plan is ok good shape and you should lean toward not taking the lump sum."  That could be an over-generalization, and I don't think I agree, but it's not terrible advice.  If I were the OP I'd request to see some math to defend that.  But after all, it's just one person's opinion.  \n\nThese types of offerings are all the rage right now due to wild interest rates.  In general, I've seen that the percentage of people that accept the lump sum is around 40%-60%.  So clearly people have different view points.  This thread seems to be proving that."
  