There has been a lot of talk lately in the news about pension buyouts. In the coming weeks and months, thousands of employees from Ford and General Motors will be making decisions that could impact their financial situation in their retirement.
Whether it is the automaker buyouts, or simply a situation where you leave one job in favor of another, consumers are regularly faced with situations where they have the option of receiving their retirement funds in a lump sum.
“We often have clients ask if they should roll over their investment funds or use some to pay off existing debt,” said Bill Druliner, GreenPath Debt Solutions manager and counselor. He suggests that employees facing a large pension buyout work with a certified financial planner and their existing workplace resources.
“Both resources will be able to discuss your retirement account options,” said Druliner.
Furthermore, Druliner stressed that most financial planners will likely tell you not to take retirement funds to address existing debts.
“However, the temptation is there to work on getting ahead of your debt, especially if the interest rates or payments are burdensome.”
There are many options available to you that would preserve your retirement funds, yet, at the same time, allow you to address your debt concerns at more reasonable terms.
GreenPath’s counselors are trained to help you explore options, in an unbiased way. If you have questions, GreenPath offers free debt and credit counseling by calling 866-864-2963 or by logging on to www.greenpath.org.