Presented by: Benjamin Bogetto
Why You
Might Not Want a Lump-Sum Retirement Payout
Do you have the option of receiving your
retirement money as a lump sum? You may want to turn that choice down. A new
MetLife study, Paycheck or Pot of Gold,
warns of the “lottery effect” that can occur when all that money makes its way
into a household at once. Surveying more than 1,050 retirement plan
participants who had taken lump-sum payouts, MetLife found that 21% had already
used up 100% of that money; on average, it had disappeared in less than six
years.
Like a lottery winner bereft of financial
counseling, a recipient of a lump-sum retirement payout can too easily find
ways to part with those dollars. What did the respondents to the MetLife survey
do within a year of taking their lump sums? In some cases, the money was
practically spent: 27% used the funds to attack debt, and 20% said that they
made home improvements. On the other hand, 22% gave some of the money away
(sometimes to family members and friends), and 12% bought a new car or took a
major vacation. Looking back, 31% lamented some of their buying and spending
decisions in the first year after taking the lump sum, and 23% regretted
financial gifts they had made. Education about the merits and demerits of
lump-sum payouts may be insufficient – in the survey, only 45% of pension plan
participants offered the choice between a lump sum or a lifelong income stream
remembered being given a comparison of the two options.1
Baby
Boomers Redefine the Recliner
The easy chair – a mainstay of living rooms
during the 1960s and 1970s – is making a comeback thanks to demand from
boomers. Recliners back then were often big, bulky, and ugly; now, they have
cleaner lines and smaller footprints. Lift chairs, which help seated people
rise more easily, are also losing their institutional look.
La-Z-Boy introduced the recliner back in
1928, and if the furniture makers who came up with that first design were to
see recliners today, they would undoubtedly be impressed with their evolution.
Some of the new reclining chairs and sectionals are “wall huggers” – the seat
moves forward when the unit reclines, which means you can place the recliner
against a wall. Many have better lumbar and neck support than their
predecessors, and some will even charge your phone or keep your drink cool. A
2015 Furniture Today study showed
that 40% of recliners were being bought by baby boomer households.2
On the BRIGHT SIDE
A little-known IRA fact: if you retire, but your spouse keeps working, your spouse may be eligible to contribute up to $6,500 a year to an IRA (or IRAs) you own.3
A little-known IRA fact: if you retire, but your spouse keeps working, your spouse may be eligible to contribute up to $6,500 a year to an IRA (or IRAs) you own.3
Securities offered through First Heartland Capital, Inc. Member FINRA/SIPC
Bogetto Financial is not affiliated with First Heartland Capital, Inc.
Bogetto & Associates does not provide legal or tax advice. These topics are discussed in conjunction with your CPA, Tax Advisor and Attorney.
This material was prepared by MarketingPro, Inc., and does not
necessarily represent the views of the presenting party, nor their affiliates.
This information has been derived from sources believed to be accurate. The
publisher is not engaged in rendering legal, accounting or other professional
services. If assistance is needed, the reader is advised to engage the services
of a competent professional. This information should not be construed as
investment, tax or legal advice and may not be relied on for the purpose of
avoiding any Federal tax penalty.
CITATIONS.
1 - nextavenue.org/lump-sum-annuity-retirement/ [4/11/17]
1 - nextavenue.org/lump-sum-annuity-retirement/ [4/11/17]
2
- mercurynews.com/2017/03/27/embraced-by-baby-boomers-recliners-get-a-makeover/
[3/27/17]
3
- kiplinger.com/article/retirement/T054-C000-S001-4-overlooked-tax-breaks-for-retirees.html
[3/14/17]
4
- todayifoundout.com/index.php/2015/01/plain-old-soap-doesnt-kill-bacteria-can-really-effective-getting-rid/
[1/8/15]
Financial Health...For Now & Tomorrow
Contact us Today
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
Website - www.bogettoandassociates.com
Telephone - 314-858-1602
Email - peter@bogettoandassociates.com
10805 Sunset Office Drive, Ste. 202
St Louis, MO 63127
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