Why Is not Getting Love millennium of Financial Advisor

If you work for a company with a pension plan, do not be surprised if you get a lump sum bid for the soon-purchase deal where you receive a pile of cash in exchange for a promise of lifetime income when you retire. 

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The price tag for this offer very attractive at this time, from the perspective of plan sponsors. But workers may be better to hold out for a better deal, or to reject the purchase at all. 

More and more plan sponsors trying to get out of the pension business, or relieve their obligation, to buy out the workers. Number of bids has accelerated in recent years, partly due to changes in interest rates mandated by Congress that reduces their costs for plan sponsors. 

Now, the revised projection for the average longevity of Americans give plan sponsors a new reason for speeding up the bidding. New Internal Revenue Service actuarial tables applicable in 2016 showed an average life span increased by about four years respectively for men, with an average of 86.6 years, and women, to 88.8 years. 

The new mortality table will make a lump sum offer 3% to 8% more expensive for sponsors, according to a recent analysis by Wilshire Consulting, which advises pension plan sponsors. Another implicit message here is that the lump sum should offer more valuable to workers who take them after the new mortality table is applied.

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