Lump Sum versus Payments – Making Smart Choices

Lump Sum versus Payments

Lump Sum versus Payments – Making Smart Choices

One of the first things you should think about when you are looking at options to replace your income is the idea of lump sum versus payments. However, keep in mind that you may use the cash you get from selling your annuity to supplement your retirement pension. That’s why it’s important to find an experienced consultant who will explain the differences between these two payment methods. Remember that it’s possible to withdraw money from your annuity without paying taxes on it. So, if you want some extra cash each month, consider investing the lump sum to help yourself.

When it comes down to it, lump sum versus payments are really about compare the amount of time and effort it would take you to earn that money. While it might be true that a lump sum does not represent a stable source of income, it’s important to understand that it will eventually produce a future value. With most retirement plans, the plan is to eventually allow you to withdraw your money at a reduced rate. But, if you don’t have a vested interest in the future value of that money, it will probably be left sitting around. By making periodic investments with your annuity, you are potentially providing a source of income that will consistently provide a monthly flow.

In addition, a lump sum versus payments can be a good financial tool when you are trying to invest to build wealth over the long haul. While you won’t be able to give up your initial investment with a lump sum payment, you can certainly buy a lot more expensive pieces of real estate and spread your risk over a longer period of time. This will allow you to take advantage of low interest rates, while building equity and a source of income in the meantime.

Of course, lump sum versus payments should also be considered on a case by case basis. If you have specific needs, like health insurance, your lump-sum payment may not be adequate. There are so many variables in a lump sum payment, and it’s important to understand them in order to make the right decision for you. In some cases, it might even be better to pay a lower monthly fee to a company that will take care of things if you are unable to make a payment.

As with any investment, you need to take a long hard look at all the pros and cons before investing in any type of plan. In Canada, there are both federal and provincial programs available to help people with disabilities find the work and income they need. In Ontario, there is also the Disability Tax Credit that will allow registered disability dependents to receive a tax rebate on their income, based on their income level. The Canadian Disability Corporation provides training and advice to those who are considering investing in disability securities. In fact, the CDA is one of the most popular of all investment groups in Canada. If you do decide to invest in disability securities in Canada, you need to talk to a qualified broker to find out more information about the various options available to you.

When considering lump sum versus payments, you must also consider the effect of a pension plan change. If you have investments outside of the pension plan, such as mutual funds, real estate, CDs, or other investments, the impact of a pension change could be very substantial. A change in the cost-of-living increase, or a pension option that allows you to defer the cost of retirement could mean that your annual pension contribution would decline. The value of your investment portfolio could also go down if the cost of living increase is going to be implemented. By being aware of all these things, you’ll be able to make the best decision for you and your future.