Platinum Contributing Member ViperGTS/Z1 Posted August 10, 2023 Platinum Contributing Member Share Posted August 10, 2023 I have the opportunity to take a one-time 50k lump sum payment upon my retirement with the only penalty being a slightly reduced monthly pension payment for life. The money is not really needed but if I can invest in something fairly safe, it may be to my benefit. I figured it will take nearly 15 years of pension payments to make up the difference in the 50k....so in other words, I am ahead of the game for 15 years and then would start to be under water after that if I had not taken the 50 and had higher monthly payments. If I am able to make a profit, then the 15 years would be extended further and I would already be 76 at that point. So again.... I would be able to invest in something long-term... Maybe a 15-year time frame if needed. Where would the best place be to put that money ?...It's been a real tough decision for me whether to take any money or not...pros and cons to both . I could also get a 10k or 25K lump sum instead with less taken out monthly . Thanks for any opinions and suggestions I may not have thought of. 1 Quote Link to comment Share on other sites More sharing options...
Crnr2Crnr Posted August 10, 2023 Share Posted August 10, 2023 Currently... CDs are a safe harbor. Market isn't trustworthy to drop a lump into at the moment imo. Real estate... but you can't get much for $50k these days and when you add in property taxes, etc. Do you have a financial advisor? If so, take that advice with a grain of salt depending upon their fee and commission basis. Personally I'm sitting in a good bit of cash and safe harbor investments while waiting for a collapse in real estate. Quote Link to comment Share on other sites More sharing options...
Doorider Posted August 10, 2023 Share Posted August 10, 2023 (edited) I'd ust stick it in a 18 month CD at 5% and see what happens after that time. That will make you a guaranteed $3800, then decide what to do with your $53800. If you're playing the long game, an index fund like VTI or VOO isn't a bad idea. If you want to dabble in real estate, you could buy into a REIT. I bought up some VNQ a couple months ago when it was just below $80 a share. It follows real estate markets and pays a strong dividend. Edited August 10, 2023 by Doorider 1 Quote Link to comment Share on other sites More sharing options...
Doorider Posted August 10, 2023 Share Posted August 10, 2023 I trade some individual stocks and have some like Apple, Disney, Ford, Boeing that I'm holding for the long run. Others I've bought and sold for quick profits (sometimes gamble and lose). The majority of my investments are in these 3 funds. 1/2 my money is in VTI, then a good amount in the other two. Quote Link to comment Share on other sites More sharing options...
Mainecat Posted August 10, 2023 Share Posted August 10, 2023 Yup CD for right now. Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Shifty Posted August 10, 2023 Platinum Contributing Member Share Posted August 10, 2023 Screw safe right now. Make hay while the suns out. Energy is where it’s at. Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Shifty Posted August 10, 2023 Platinum Contributing Member Share Posted August 10, 2023 Energy spelled o i l. Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted August 10, 2023 Platinum Contributing Member Share Posted August 10, 2023 6 minutes ago, Mainecat said: Yup CD for right now. Joe's market not good enough for you? 1 Quote Link to comment Share on other sites More sharing options...
Platinum Contributing Member Highmark Posted August 10, 2023 Platinum Contributing Member Share Posted August 10, 2023 My local checking just went to 4.5% interest with $50K minimum balance. Quote Link to comment Share on other sites More sharing options...
akvanden Posted August 10, 2023 Share Posted August 10, 2023 If long term, throws it in a low cost index fund and forget about it. Quote Link to comment Share on other sites More sharing options...
ArcticCrusher Posted August 10, 2023 Share Posted August 10, 2023 21 minutes ago, Crnr2Crnr said: Currently... CDs are a safe harbor. Market isn't trustworthy to drop a lump into at the moment imo. Real estate... but you can't get much for $50k these days and when you add in property taxes, etc. Do you have a financial advisor? If so, take that advice with a grain of salt depending upon their fee and commission basis. Personally I'm sitting in a good bit of cash and safe harbor investments while waiting for a collapse in real estate. To make $$$ in real estate you need to be leveraged thats where REITs come in for that kind of investment. 5 minutes ago, Doorider said: I'd ust stick it in a 18 month CD at 5% and see what happens after that time. That will make you a guaranteed $3800, then decide what to do with your $53800. If you're playing the long game, an index fund like VTI or VOO isn't a bad idea. If you want to dabble in real estate, you could buy into a REIT. I bought up some VNQ a couple months ago when it was just below $80 a share. It follows real estate markets and pays a strong dividend. My best investment is private equity with monthly cash flow that is all capital gains, private REITs. Almost a 20 year history with zero loss track record. Public Apartment REITs as well but be careful on the asset class, that's why I stated Apartment. I am out of the index market for the most part and also have quality energy dividend stocks. Quote Link to comment Share on other sites More sharing options...
Anler Posted August 10, 2023 Share Posted August 10, 2023 Covered call ETF's and REITs Quote Link to comment Share on other sites More sharing options...
dsupercat Posted August 10, 2023 Share Posted August 10, 2023 Cd's paying as high as 5.75 money markets 5.25. A good equation I use is what every percent of intreast you can get divide by 72 to determine how long it will take to double your money. I use this website to find cd and money market rates. https://www.annuityexpertadvice.com/rates/cd-rates/ Quote Link to comment Share on other sites More sharing options...
ArcticCrusher Posted August 10, 2023 Share Posted August 10, 2023 2 minutes ago, dsupercat said: Cd's paying as high as 5.75 money markets 5.25. A good equation I use is what every percent of intreast you can get divide by 72 to determine how long it will take to double your money. I use this website to find cd and money market rates. https://www.annuityexpertadvice.com/rates/cd-rates/ CD's are good when your not sure where to put you $$$. The tax rate in Canada on interest income is 2x that on Capital gains unless its in a tax free retirement account. Quote Link to comment Share on other sites More sharing options...
jdsky Posted August 10, 2023 Share Posted August 10, 2023 It's not that simple and not enough info for anyone here to give meaningful advice. You need to understand what exactly is the rate of return on the pension based on not taking the lump sum vs taking it. My wife, and nearly everyone else I know with a pension these days, usually has an option to cash out and that cash number changes each year. In my wife's specific case even with their best offer she would have to make returns above the historical market average with that cash to get ahead so it's better for her not to cash out yet. I'm not suggesting this is the best option for you just that you need to look at the actual annual return you need to make on that money including any tax situation you may have. 4-5% interest rates on savings accounts will evaporate immediately once the fed lowers interest rates. The longest guaranteed rate CD I have seen is 4 or 5 years and around 4.5% right now. Five years is far too short a timeframe for anyone not actually well into retirement. For my parents both 83 years old right now, they are just fine with a 4 or 5 year CD but this is not really a good option for someone still waiting to retire. The market is the only way to achieve long term returns that will exceed that of most pensions over time. How you invest in the market is personal based on your own risk tolerance and timeline. 1 Quote Link to comment Share on other sites More sharing options...
snoughnut Posted August 10, 2023 Share Posted August 10, 2023 1 hour ago, Crnr2Crnr said: Currently... CDs are a safe harbor. Market isn't trustworthy to drop a lump into at the moment imo. Real estate... but you can't get much for $50k these days and when you add in property taxes, etc. Do you have a financial advisor? If so, take that advice with a grain of salt depending upon their fee and commission basis. Personally I'm sitting in a good bit of cash and safe harbor investments while waiting for a collapse in real estate. You'll be waiting awhile, that isn't going to happen. This isn't 2008. Quote Link to comment Share on other sites More sharing options...
Crnr2Crnr Posted August 10, 2023 Share Posted August 10, 2023 41 minutes ago, ArcticCrusher said: To make $$$ in real estate you need to be leveraged thats where REITs come in for that kind of investment. My best investment is private equity with monthly cash flow that is all capital gains, private REITs. Almost a 20 year history with zero loss track record. Public Apartment REITs as well but be careful on the asset class, that's why I stated Apartment. I am out of the index market for the most part and also have quality energy dividend stocks. I was referring to purchasing land or undeveloped property... but $50k doesn't get you anything these days. There's a ton of different no brainer investment vehicles for folks to utilize... It depends upon risk/reward but moreso comfort level. Any investment you feel the need to constantly watch isn't ideal for most, especially anyone creeping into retirement age. Hence my safe harbor suggestions. Are you interested in purchasing three multifamily apartment buildings? Quote Link to comment Share on other sites More sharing options...
Crnr2Crnr Posted August 10, 2023 Share Posted August 10, 2023 26 minutes ago, snoughnut said: You'll be waiting awhile, that isn't going to happen. This isn't 2008. we'll see... Quote Link to comment Share on other sites More sharing options...
Crnr2Crnr Posted August 10, 2023 Share Posted August 10, 2023 crYpT0... a vintage snowmobile collection... wait... https://collecttrumpcards.com/ Quote Link to comment Share on other sites More sharing options...
Advertising Member Seatofmypants Posted August 10, 2023 Advertising Member Share Posted August 10, 2023 (edited) Start a bbq and spice company. Edited August 10, 2023 by Seatofmypants 2 Quote Link to comment Share on other sites More sharing options...
DriftBusta Posted August 10, 2023 Share Posted August 10, 2023 I have 5.3% one year CDs right now, but T bills are actually a little bit better if you have a state income tax, because they are state tax exempt. Depending on what your time Horisont is, I still like some individual stocks or a well-managed broad-based large cap fund. T Rowe price, JP, Morgan, MFS or even American funds. Growth fund of America are all doing really well this year. Quote Link to comment Share on other sites More sharing options...
Crnr2Crnr Posted August 10, 2023 Share Posted August 10, 2023 Would you be interested in investing in Prestige Worldwide? 1 Quote Link to comment Share on other sites More sharing options...
Rod Posted August 10, 2023 Share Posted August 10, 2023 With the way interest rates are you can get decent returns on something safe, and 50k really hardly does anything for buying real property Quote Link to comment Share on other sites More sharing options...
Guest Posted August 10, 2023 Share Posted August 10, 2023 Hookers and blow Quote Link to comment Share on other sites More sharing options...
Rod Posted August 10, 2023 Share Posted August 10, 2023 5 minutes ago, HSR said: Hookers and blow Cigarettes and dope and mustard and bologna and liquor and whores 2 Quote Link to comment Share on other sites More sharing options...
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