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PSERS Lump-Sum…Take It or Leave It ?

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Earlier this week we asked you what the breakeven return was to compare pulling out your PSERS lump sum versus leaving the money at PSERS when you retire.  Your responses were all over the board – from a low of 3.25% to a high of 8%!

The answer is usually between 6.5% and 7%.  Which means that is what you would need to average in an investment return to just break even!  I would guess you are probably not getting 7% right now on your portfolio considering all the market volatility we have experienced of late.  So, does that mean you should leave your lump sum in PSERS?  Maybe, but, more likely no.  Remember for those who leave the money in, PSERS uses that first to pay you your pension benefits.  So, if you die after a tad over two years after you retire, there is no lump sum available for your heirs.  If you roll it over, the entire amount would be available for your heirs who can keep the tax deferral going.

We provide an actual case study of the details behind these calculations and more at our workshops, so be sure to come on March 9th or March 14th.  Register today!

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