Commuted value or monthly pension?

[lizzie bargain]

Does anybody have any experience/advice or links regarding this topic? Thanks

[ellis123]

Will send you a pm

[Carlotta]

Does anybody have any experience/advice or links regarding this topic? Thanks

My advice is to go and speak to a fully qualified financial planner. (Not just an investment advisor)

There are so many things that you need to consider when determining your options. First and foremost is whether you are a spender or a saver. If you are a spender, you should definitely NOT commute your pension as you will burn through your money quickly and be left at age 75 eating Kraft dinner and never leaving your home. On the other hand, if you have a life threatening illness, commute your pension... your family may as well get the use of your money rather than the company holding the pension. Also, if both spouses are going to be receiving Defined benefit pensions, commuting one and leaving the other intact can be effective. IPP's are another option if you are thinking of opening a consulting business etc, but can also turn into a CRA nightmare.
Bottom line is that there is no ONE answer. Each person's circumstances are different. Do you have a lot of existing debt? Does your spouse work and do they have a pension? What are your retirement plans? How old are you? How is your health? Do you have a history of longevity in your family? How much money do you have available outside of your pension? And are you a spender.... if you were to commute your pension, would the first thing you would do be to run out and buy your dream car or to go on an extended vacation?

Depending on how you answer the above questions and the hundreds of others that go along with this decision will determine the best option for YOU. There are a lot of tax consequences, estate issues, debt management and investment choices that have to be considered.

I have commuted many pensions, but I have also counselled AGAINST it in even more cases. Make sure the financial planner you see lays out ALL of your options and the pitfalls and advantages of each scenario.

[lizzie bargain]

Thanks Carlotta and Ellis-I know it is very complicated!

[jasperandchar]

Can't help or provide advice, best of luck in your decision(s).