Wondering What To Do With Your Lump Sum Pension Payout?

The federal government just made it easier to get rid of traditional pension plans, a retirement plan that is already disappearing in America.  

In early march, the Treasury Department ,very quietly, issued a notice that allows employers to buy out current retirees from their pensions with a one-time lump sump payment.  They failed to mention that this strategy actually shortchanges the seniors, and because of this, the practice was banned in 2015.  

In an recent article from CNN written by Lydia DePillis entitled, "It just became easier for employers to dump retirees' pensions," DePillis explains how a lump-sum is a losing deal for retirees, "In 2015, the Government Accountability Office issued a report finding that the rules the IRS had set up around mortality tables and interest rates allowed companies to offer lump sums at a significant discount to the actual value of the pension.  Retirees who tried to reinvest the lump-sum payments would almost inevitably lose out."

The article also quotes Karen Friedman, policy director of the Pension Rights Center. Friedman states, "You'll never replicate the annuity you're getting from the pension plan.  You're getting 20% to 30% less than what the pension could buy, and you're going to try to regain that in the stock market, it's basically impossible."

So is there an alternative to investing the funds in the stock market?


Lasaii Benefits Offers Creative Solution

Our program is for people who believe in using their IRA, or a portion of it, to help purchase real estate to occupy and/or to create income.  If you are a real estate oriented investor, we can take the money you received from the pension buy-out and invest it in a SAFE-HARBOR®-Directed IRA™(SHIRA™).  The SHIRA™ invests the money in a protected account safe from any down turn of the stock market, with upside potential when the market does well.

But that's not all-the SHIRA™ allows you to invest in real estate that you and your family can occupy and/or use to CREATE INCOME with no prohibited transactions.  There are no prohibited transactions because the title of the real estate is in your name, not in the name of the IRA.

The benefits of investing in a SAFE-HARBOR®-Directed IRA™ to use for an investment in real estate?

  • Occupancy-you and your direct family members can occupy the real estate.

  • Rental Income-payable to you, not to your IRA.

  • Step up in basis-allows your heirs to inherit the real estate at it's appreciated value with no tax consequences to them.

  • Flexibility-use the real estate as a vacation home and/or rent the real estate to create income.

  • Control-increase, decrease, or stop withdrawals to allow for accumulation and growth at any time.

  • Tax Benefits-(if you qualify) receive tax write offs associated with real estate ownership.

  • RMD-any withdrawals that you take from the SHIRA™ would count towards your required minimum distribution.

Lasaii Benefits is Able to See the Big Picture:

DePillis warns, "For retirees, taking a lump sum is entirely voluntary.  However, behavioral economists have found that people tend to value money that's right in front of them over money they will get in the future, even if the total over time would be greater."

Our clients look at the bigger picture and know that over time with the possible interest earnings of the SHIRA™, the potential appreciation of the real estate, rental income, and the intrinsic value of occupancy, together with the tax write-offs (if you qualify), the total value and benefits of the SHIRA™ and the real estate could be, and has been, in the double digits.  In other words, the perfect alternative investment.

*Again, our program is for real estate oriented investors, NOT stock market oriented investors.

Lasaii Benefits Values Hard Work

Josh Gotbaum, who served as directed of the PBGC from 2010-2014 emphasizes,  "You're taking a group of people who are retirees who are already living their lives on a pension, and you are saying to them, 'here, instead of the pension, why don't you take this big check.' and they don't bother to tell them that this big check is worth less than your pension." 

At Lasaii Benefits, we understand how important your retirement money is and how hard you've worked for it.  We don't think it's right to shortchange someone with their hard earned money and that's one of the reasons we do what we do: create alternative investment solutions.  If you or anyone you know is in this situation, please share this so that they know that they have options. 

We specialize in helping clients structure customized, tax effective IRA real estate investments that enhance their portfolios, lifestyles, market positions, and legacies.

Please visit our website to learn more about our program, to see if you qualify for our program, to learn about the other innovative services we offer, or to sign up for our weekly newsletter.

"I just want to say thank you to his company [Lasaii] that I have been invested with for the past eight years. I was truly blessed the day I found your advertisement in a magazine on an airplane. I have made money in good and bad times, amazing! Thank you so much for all you have done."

Mary, CO, Client


DePillis, Lydia. “It just became easier for employers to dump retirees pensions.” CNN Business. 20 March 2019