Annuitize Your Pension (One of the Best Tips)
Although you will be generally advised to avoid annuity, you should annuitize your pension. Usually, for pension, you get two options.
The first one is to get a lump-sum distribution while the second one is to annuitize it, thereby earning you a monthly income for life. There are several factors you can consider in deciding what option works best for you.
They can include life expectancy, rate of investment return, and your demand for liquidity. Most advisors will suggest you take the lump-sum distribution since they also get paid from the money you receive.
Annuitizing your pension will also save you from quick spending and help you better with planning for your retirement. An assured monthly income can be more stable than investing the funds in other prospects.
You Should Delay Getting Social Security
A delayed Social Security can earn you a guaranteed investment return of 8% on the Social Security payment. This is one of the best rates and is not that common on many investments. Delaying your Social Security will also force you to fund your living expenses from elsewhere, mainly the investment portfolio.
The reason financial advisors don’t tell you this is because they charge a percentage of assets under management (AUM). They will advise you to take your Social Security immediately. Don’t lose out on a guaranteed investment return of 8%. Organize your investment portfolio instead and find a way to support your expenses.
