The purpose of this paper is to raise awareness of some of the issues a retiring partner must consider when the time comes to choose a pension option. As stated at the outset of this paper, there is no clear-cut answer and at the end of the day, “it depends” is the real answer. To make the most informed choice it is helpful to have your financial advisor prepare the analysis and “do the math.” Actively serving the law firm partner market, Round Table Wealth Management is experienced guiding families through this and many other important financial decisions.
In the next series we will consider whether it may make sense to select one pension scheme, typically the single life pension, in combination with purchasing a life insurance policy to replace the pension benefit in the event of a premature death or provide additional funds post-death. Obviously, that analysis requires many differing factors including not only life expectancy, but how long to insure, how much to insure, health status when purchasing the policy and so on.
So, was Mr. Smith’s choice of the single life pension the correct answer? Unfortunately, he did not live to his actuarial life expectancy. But that is not the end of the story. More to come