Treasury or annuity for retirement monies not needed?

[99Saturn]

NO.
You guys aren't getting this. From your very link.

"The IRS allows tax- and penalty-free rollovers from one tax-advantaged retirement plan or account to another.........."

A pension is NOT a tax-advantaged retirement plan.

Seems like from the link you posted rollover is possible given the correct circumstances. Again, N of 1 but that matches my experience years ago.

 

[MSCH]

My Wife worked at job many years ago, that entitled her to a small pension when she turned 60.

The organization reached out to her, as it is time for her to start collecting the pension. They have offered a few options.

(1) $1200 month annuity, and if she dies before me, ten-year payment to me of $1200, or death, whichever comes first. If I die first, she collects the annuity until her death. The annuity is fixed, no changes in the payout due to inflation.

(2) lump sum payment into a 401k. They did not state the amount of the payment.

We don't want/ need to utilize the money for the foreseeable future. We are very concerned about taxes, as would hate to take $1200 per month, and pay $500 of it in taxes per month. We don't want any risk whatsoever. I started reading on annuities, and the risk seems to be failure of the annuity, or large percentage gains in inflation. I will continue to work most likely full time for the next six to seven years, and we pay a chunk annually in federal income tax, and expect that to be the case until I retire.

What we would feel best with, if available and feasible, is US treasuries, where the interest is reinvestable. Not sure a fund like that is available for a 401k. We don't want corporate or non federal government bonds. And zero interest in buying equities/ stocks, to include index funds.

GON I know you said zero interest in equities stocks mutual funds etc... but I used to keep some cash in this, but I would roll the 401k into a self directed IRA, and unless you are at or past minimum withdrawal age, just let it ride.

Fidelity® Floating Rate High Income Fund​

it paid monthly, share price fluctuated a little bit in either direction but it seemed pretty reliable to me. https://fundresearch.fidelity.com/mutual-funds/summary/315916783

 

[z71bill]

I think you may be able to do a tax free roll over into a self directed IRA -

I did this last year - now I can decide what I invest the $ in and also decide when I draw out the $$

Annuities are good for people that spend every penny they get their hands on -

So these folks are better off with $1,200 a month for life - becauase if you gave them $200K in a lump sum it would be gone within a year and then they would starve.

I rolled my 401K over and purcased a bunch of CDs that earn 5% for the next 5 years - but I will not be drawing any of this interest out - so I will not pay any taxes on it until I withdraw it.

I had a brokerage account at Fidelity - my 401K from my employer was also with Fidelity -

I was dreading doing the rollover - but once I started it took 10 minutes - WOW

The guy from Fidelity said he could also roll over any other accounts almost as easy - but the one ROTH IRA I still have is so small it isn't worth messing with.

 

[zzyzzx]

Yes, it is (was) a pension plan. But it appears that they are not offering a traditional pension payout that includes cola, instead they are offering a fixed annuity.

Wife is going to call Fidelity to get the lump sum amount today.

If it's anything like mine, you can log into your fidelity account and see the lump sum, and calculate the monthly "pension" that's really an annuity payout based on calculation you run based on inputs like when you want to start receiving it, your age, if you have a spouse.

 

[GON]

If it's anything like mine, you can log into your fidelity account and see the lump sum, and calculate the monthly "pension" that's really an annuity payout based on calculation you run based on inputs like when you want to start receiving it, your age, if you have a spouse.

The liabile party for the pension removed the lump sum option, even through it was in the correspondence my wife was sent. They stated annuity only.

I have no idea why, but speculate the liable party is able to dump the obligation to another organization (protected subsidie of Fidelity), at a lesser cost than lump sum.

We are a bit disappointed, only because of risk of inflation. We have to pay taxes on this money, etc. A lump sum may have delayed the tax liability, and allow some strategies to combat inflation.

 

[zzyzzx]

The liabile party for the pension removed the lump sum option, even through it was in the correspondence my wife was sent. They stated annuity only.

I have no idea why, but speculate the liable party is able to dump the obligation to another organization (protected subsidie of Fidelity), at a lesser cost than lump sum.

We are a bit disappointed, only because of risk of inflation. We have to pay taxes on this money, etc. A lump sum may have delayed the tax liability, and allow some strategies to combat inflation.

I would still log into your Fidelity account to see if something shows up somewhere that allows you to calculate payouts.