I am old enough to retire and have a choice of receiving a either a lump sum or monthly payments, which are substantially higher than returns I could get from investing the lump sum. For that option I would sign over the lump sum. My pension is controlled by a labor union in an industry that has seen union membership fall off recently. Under what conditions could the monthly payments be reduced if union membership declines even more? Would it be wiser to retire now(not my intention) or wouldn't it matter?
I have no idea what the pension reserve is in your union or where it is located. For many people doing a monthly payment can be a wise choice. However, you should have an accountant and/or lawyer find out as much as they can about the pension before making the decision. My own wife took out her pension in a lump sum when she discovered the company holding the reserve was in a serious financial crisis, Withdrawal of a lump sum can subject you to a large tax bite. Also early retirement means the monthly payments will be less than if you had waited until you reach the normal retirement age,
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Mr. Sarno is licensed to practice law in NJ and NY. His response here is not legal advice and does not create an attorney/ client relationship. The response is in the form of legal education and is intended to provide general information about the matter in question. Many times the questioner may leave out details which would make the reply unsuitable. Mr. Sarno strongly advises the questioner to confer with an attorney in their own state to acquire more information.