Liz is retiring from the US Postal Service and will turn 70 next year. After...
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Liz is retiring from the US Postal Service and will turn 70 next year. After 39 years of service, her monthly pension is $7,500. She does not qualify for Social Security. Liz has accumulated $700,000 in her thrift savings plan. The government requires that she convert it to an annuity or move it to a IRA. All of the money is pretax and tax can be avoided if it is moved to the IRA. The annuity will be calculated based on her life expectancy of 17.5 years after age 70. The current US Treasury long-term bond rate is 3 percent. Should Liz take the annuity or move the money to the IRA? The tax regulations require that she take out 4 percent of the amount each year.
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