C
Crow Paddy
Guest
I got a buyout bond a few years ago due to my former employer winding up their pension scheme. I'm now working with a different company with its own scheme.
The question is about cashing the buyout bond early (at age 50), and specifically, converting it completely to cash. In other words taking the 25% lump sum tax-free and also the remaining part which would be subject to income tax, rather than buying an annuity with it. The reason I want to do this is to pay off debt and fund kids in college, but also because the bond would be worth very little as an annuity.
My understanding is you can do this, if you can show a guaranteed income of 12K for the rest of your life. The thing is I wouldn't be retired from my current job. So, I'd still be working, but the pension fund from the current job would amount to a pension annuity over that limit, at normal retirement date. So, would that meet the criteria?
The question is about cashing the buyout bond early (at age 50), and specifically, converting it completely to cash. In other words taking the 25% lump sum tax-free and also the remaining part which would be subject to income tax, rather than buying an annuity with it. The reason I want to do this is to pay off debt and fund kids in college, but also because the bond would be worth very little as an annuity.
My understanding is you can do this, if you can show a guaranteed income of 12K for the rest of your life. The thing is I wouldn't be retired from my current job. So, I'd still be working, but the pension fund from the current job would amount to a pension annuity over that limit, at normal retirement date. So, would that meet the criteria?