Lump Sum vs. Annuity Worksheet 

Thank you for checking out this valuable analysis tool that I created for employees who are planning for retirement and participate in a pension with a lump sum option. This worksheet is designed to help you better understand how life expectancy, the rate of return and other variables impact your pension decision... a decision that could mean the difference of thousands and possibly tens or hundreds of thousands of dollars to you or your heirs. Feel free to call me at (615) 462-6879 if you have any questions or need assistance.

None of your data is saved to protect your privacy. You may only change the data in the yellow fields. Some fields will have a drop down with only specific options available. After entering your Pension Estimate Data as provided by your employer, scroll down to enter your Expected Rate of Return, Annuity Option and Life Expectancy.  Each time you change any of these three variables, scroll down to view the charts and take note of how the changes can drastically impact your results. Your goal is to estimate the most likely set of variables which will help you determine which pension option will provide you and your beneficiaries with the maximum benefit.

Follow the steps and let me know your thoughts, questions, and suggestions when you are finished. Come back as many times as you want. We also encourage you to share this page with your colleagues who are also contemplating the lump sum vs. annuity question.

If you get stumped, just scroll to the bottom of the page and schedule a call. We can go through it together.


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Important disclosure: This report is for illustration and informational purposes only. In order to make a mathematical comparison between the lump sum and the various annuity options, unless stated otherwise, the illustrations and calculations are based on the unlikely assumption that a retiree who elects the lump sum will make withdrawals at the same monthly dollar amount as the annuity option to which it is being compared. All results are based on pension benefit option data provided by the employer and entered by the employee/client. Estimates of the rate of return of an invested lump sum may be more or less than the actual returns. Actual future investment returns are unknown. Do not rely on this report to predict future investment performance. The sequence of returns is not considered in this analysis. Dates of birth, dates of death, and life expectancies are provided by the employee/client. This information has been used to illustrate hypothetical life expectancies for the employee and joint annuitant when applicable. This hypothetical information may provide a result that is different from actual mortality, unknown at the time of this analysis. If actual information had been known, the results would have made the various options higher or lower than calculated. The optimal strategy for a specific employee/client/joint annuitant depends on their investment experience, risk tolerance, other assets, financial discipline, family dynamics, and variables unknown at the time of this analysis. As such, it is ultimately the responsibility of the employee/client to carefully consider the options based on the best information available at the time of the benefit election. The software used for this analysis was developed by Roger N. Walker, an independent financial advisor. Roger N. Walker, Radian Partners, LLC, Csenge Advisory Group, and FSC Securities Corporation cumulatively and/or independently shall have neither liability or responsibility to any person or entity with respect to any loss or damage caused, or alleged to be caused, directly or indirectly, by information contained in this report.

FSC Securities Corporation, Radian Partners, Csenge Advisory Group and Roger Walker are not affiliated, endorsed nor employed by the companies listed here which includes but is not limited to Pension Benefit Guarantee Corporation (PBGC). Calculators made available as self-help tools for your independent use and are not intended to provide investment advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances.  All examples are hypothetical and are for illustrative purposes and are hypothetical examples of the various approaches that can be taken to assist clients with their retirement planning needs. The results depicted in this communication are unique to the hypothetical cases presented and should not be construed as a guarantee of future results. Annuity guarantees, including guarantees associated with benefit riders, are subject to the claims-paying ability of the Insurance Company when applicable.

Data appearing in this example is for guidance, is hypothetical and not real client data.