Natalie Pace. bestselling author of The Gratitude Game, The ABCs of Money & Put Your Money Where Your Heart is. Co-creator of the Earth Gratitude Project.
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Should I Take a Buyout On My Pension?

18/9/2017

3 Comments

 
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Dear Natalie,

My former employer is offering me a small payout or pension benefits. The payout is around $16,000 and the pension benefits are $178/month ($2,136/year). I am leaning towards the payout and investing in some good stocks. I only have until Oct 2 to decide. Can you offer any advice?

 
Signed,
Every Little Bit Helps!
 
Dear Smart to Ask for Help!
 
This is really a two-part question. One is, “Should I take the buyout?” and two is, “Can I make a killing in stocks?”
 
Should I Take the Buyout?
If you are willing to learn about investing and be a good steward of your money, then taking a buyout is very likely a great idea. Most companies are underfunded on their pensions, and this is unlikely to improve in the coming years. In 2016, S&P 500 companies were underfunded by $391 billion on their pensions, with plans only 80.75% funded. Other post-employment benefits (like health benefits) were even more severely underfunded. Your company is one of the most severely underfunded in the U.S. So, the next offer you get could be a lot less than what you are currently being offered. Many legacy companies use Chapter 11 to restructure their debt and pension obligations when they get too overloaded. That is a risk going forward as well, if you choose the payment plan.  

If you want to discover whether or not your company is severely underfunded on pensions and/or other post-employment benefits, this information is often found in the annual earnings report. That is a lengthy, unwieldy report that is quite hard to read, until you learn how to do power-searches. I can usually locate this information in about 5 minutes. If you are not familiar with earning reports then you might not find this data at all!
 
Should I Invest in Stocks?
Even great stocks lose money in a bear market. So, it’s important to educate yourself on investing before you dive in to the stock market, or leap into any investment on the advice of a friend, family member of financial professional. There are a few critically important rules that are easy to understand and implement, and can be the difference between growing and enjoying your returns, or watching your investment evanesce in thin air.
 
In short, you can certainly take a buyout and have that capital grow into a rewarding investment, but only if you’re willing to educate yourself and be the boss of your money. If you take the buyout and just hand it over to a “financial professional” without knowing what’s appropriate for you at your age and at this time in your life, you could end up giving the broker-salesman a great payday at your own expense. There are a lot of slick salesmen selling risky investments as “great” because they pay a nice commission (on the backend – you’ll be told that you don’t have to pay anything!).
 
You can read about The ABCs of Money in my 3 bestselling books, or you can learn them firsthand in my 3-day life-transforming Investor Educational Retreats. I also offer second opinions on your current budgeting and investing strategy in my private, prosperity coaching sessions. Call 310-430-2397 or email Heather @ NataliePace.com to learn more.
 
Test your investment skills in my Investor IQ Test.

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About Natalie Pace:

Natalie Pace is the author of the Amazon bestsellers The Gratitude Game, The ABCs of Money and You Vs. Wall Street (aka Put Your Money Where Your Heart Is in hard cover) and the co-creator of the Earth Gratitude project. Natalie Pace is a repeat guest on national television and radio shows such as Good Morning America, Fox News, CNBC, ABC-TV, Forbes.com, NPR and more. As a strong believer in giving back, she has been instrumental in raising tens of millions for public schools, financial literacy, the arts and underserved women and girls worldwide. Follow her on Twitter.com/NataliePace, and Facebook.com/TheABCsofMoney. For more information please visit NataliePace.com. Click to access a longer bio on Natalie Pace.
 
Important Disclaimers
Please note: NataliePace.com does not act or operate like a broker. We report on financial news, and are one of the most trusted independently owned and operated financial news corporations in North America. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. Any publicly traded companies or funds mentioned in this article are not intended to be buy or sell recommendations.

ALWAYS do your research and consult an experienced, reputable financial professional before buying or selling any security, and consider your long-term goals and strategies. Investors should NOT be all in on any asset class or individual stocks. Your retirement plan should reflect a diversified strategy, which has been designed with the assistance of a financial professional who is familiar with your goals, risk tolerance, tax needs and more. The "trading" portion of your portfolio should be a very small part of your investment strategy, and the amount of money you invest into individual companies should never be greater than your experience, wisdom, knowledge and patience.  

Information has been obtained from sources believed to be reliable however NataliePace.com does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this publication and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.
3 Comments
B. BOOKER
18/9/2017 02:00:55 pm

Thanks Natalie for the information. Now how do I educate myself??

Reply
Heather link
18/9/2017 04:16:29 pm

One more thing. Taking the Investor IQ Test will help you to understand what grade you get in life math and the ABCs of Money that we all should have received in high school. You will receive an A after the retreat.

Test your investment skills in Natalie Pace's Investor IQ Test.
http://www.nataliepace.com/blog/2017-investor-iq-test

Reply
Heather link
18/9/2017 04:12:14 pm

Dear B.

Here are 3 ways. Please know that as Natalie's EA, I'm happy to answer any questions in a two-way conversation. Feel free to call 310-430-2397 or to email Heather @ NataliePace.com.

1. Read The ABCs of Money. Do the chapter-a-day program of The Gratitude Game, which helps you to implement the strategies outlined in The ABCs of Money. Links to these books are available in the blog. Or I'm happy to help. Just call 310-430-2397.

2. You can get a second opinion on your budgeting/investing/retirement strategy. We offer private, prosperity coaching. It typically takes 2 sessions to give you a second opinion. One session for Natalie Pace to review what you are currently doing, and one to explain to you the areas of strength, vulnerability and perhaps even toxicity of your current plan. If this is of interest, just email Heather @ NataliePace.com, and I'll send you a price list. We offer discounts when you purchase a package of coaching sessions.

3. The easiest way to get this information and completely transform your life and relationship with money is to attend our Investor Educational Retreat. In 3 days, you'll learn a completely new money and investing blueprint, which works great. Most people report earning back the price of the retreat in the first few months in budget savings alone. Here's a link to learn more. I also sent over a few emails with additional information. The only regret I ever get is that people wish they had attended the retreat sooner!

http://old.nataliepace.com/flyers/2017/Retreat201710.htm

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    Natalie Pace is the co-creator of the Earth  Gratitude Project and the author of The Power of 8 Billion: It's Up to Us, The ABCs of Money, The ABCs of Money for College, The Gratitude Game and Put Your Money Where Your Heart Is. She is a repeat guest & speaker on national news shows and stages. She has been ranked the No. 1 stock picker, above over 830 A-list pundits, by an independent tracking agency, and has been saving homes and nest eggs since 1999.

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  • About Natalie Pace
  • Sustainability Summit
  • Books by Natalie Pace.
  • Real Estate Master Class
  • Stock Master Class
  • Options for Beginners Master Class
  • Media Images
  • Restormel
  • Natalie Pace England Financial Freedom Retreat.
  • Natalie Pace Coaching Calendar
  • Natalie Pace April 22-24, 2023 Financial Freedom Retreat. Online
  • Bond Master Class
  • Rebalancing Your Wealth Plan April 29, 2023Master Class