NonyaBiznes
Yanked Out My Purple-Blood I.V. In 2000!
Anyone heard about an early lump sum payout on the traditional retirement plan?
Early Retirement Payout
- Thread starter NonyaBiznes
- Start date
Oldfart
Well-Known Member
Unless you are in dire need, it would be wise to leave it alone. I am not sure what the tax consequences are but the account is paying a nice 4% return. Won't get that many places. I am sure MFE will have a very strong and negative opinion on this. Just disregard most advice he gives. It is usually very incorrect.
Indecisi0n
Well-Known Member
I've confirmed it.
Operational needs
Virescit Vulnere Virtus
Thank you.
Oldfart
Well-Known Member
I mispoke. I was thinking the portable. It is paying 4%
Oldfart
Well-Known Member
Like I said, I mispoke. Actually my traditional is getting about 8%, but that is market dependent . The portable does pay 4%. You get 1% every quarter and every June you get the large yearly contribution based on your previous year salary. Its on your statement.
After taking a look at your avatar I should have know you posted an "alternative fact"
You can get a lump sum on the portable, but unless they've just changed the rules you can't on the traditional. Unless you are dying can't imagine why you'd want one on the traditional. That's a monthly payment for the rest of your life and up to a 100% monthly payment for your surviving spouse.
Oldfart
Well-Known Member
You can get a Traditional lump sum when you retire. The math doesn't add up though. My lump sum only equals about 5 years of monthly payments.
No, you can't. Only on the portable pension.
Oldfart
Well-Known Member
Na Just had a brain fart.
Oldfart
Well-Known Member
Sorry. Dont know who told you that you cant. The info I got from retirement gave me all the options. Social security leveling and all the ratios for your spouse and included a lump sum. Maybe you need to.check again. My information is printed on my packet. It is even on your online statement. Retirement.fdx.com. I wouldnt even consider it but the option was there for you to think about.
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Oldfart
Well-Known Member
Just looked at the retirement.fedex.com website and the lump sum option for the traditional is definitely there. In my opinion it is not a wise choice but it might benefit someone out there.
UpstateNYUPSer(Ret)
Well-Known Member
Can you roll it over to avoid the tax hit?
I think you've got the two plans confused. The portable pension is a "cash balance" plan. You can get a lump sum from it. The traditional pension is a "defined benefit" plan. No lump sum.
Tried to sign in but as a retiree I no longer have access.
Oldfart
Well-Known Member
No confusion here. Sounds like you got bad info. Lump sum is an option on traditional.
Oldfart
Well-Known Member
I am sure you can but I do not consider a lump sum payout an option I would pick. The plan presently has some very good performing options so if you were to leave the plan, your choices might not be any better. And mainly, my lump sum option is equal to 61 months of payments. I am hoping I live long enough to draw more than 61 months of payments.
A lump sum might be an option for an single retiree because I believe the Traditional can only go to a spouse when the employee dies. He could take the lump sum and leave it to a friend or relative.
That is a big difference between the traditional and portable. The portable can be left to anyone when you die. MFE might bitch and whine about the portable but he does that about everything. The portable does have some advantages.
MrFedEx
Engorged Member
Don't do it. You will definitely be sorry unless you are at least 59.5.
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