Betty and Lou Jones were looking to retire to a warm climate and one that would get them within 100 miles of Tracy and Jonathan, their two grandchildren. They thought they had the means to buy a condo in an adult living community and travel several times a year for at least a week or two. But they started to worry when they learned of their neighbors’ plight. Charlie and Jean Thompson were all ready to make the big move to South Carolina and buy the house on the 18th hole when Charlie’s company informed them that his pension plan was going to be distributed to them in a lump sum.
They didn’t know what to do with it. Should they invest it in an annuity with an insurance company? Should they give it to a broker? Should they take it to a bank? How much should they take every month? Would Jean have enough to maintain her standard of living if Charlie predeceased her? What about taxes? Betty and Lou thought they had it all figured out. Lou’s pension was to pay them a monthly benefit and one to her if he died. That monthly amount would have been perfect to give them what they needed. Did Lou have the option to take his pension in a lump sum? What was the better course of action? Now they were very confused.