Welcome to the club.
If it is a bad deal, reject it.
The offer I got undervalued the pension by 50% by my calculations. So the offer was not a serious offer.
I valued my offer by using Fidelity to compare.
To obtain the same pension that my company has already ‘promised’ me, I would need to give Fidelity $109K right now to reproduce that deferred single life annuity.
My buyout offer was only for $71K.
This buyout would be subject to a 20% witholding and a 10% tax penalty unless it is reinvested.
They also offered an immediate single life annuity of about $369/month for life.
Fidelity said I would need to give them $91K right now to obtain such an annuity. So while this deal is substantially better than the lump sum offer, it is still not equivalent to the existing pension value.
Sounds to me like a d@mned if you do, d@mned if you don’t situation. The lump sum will be consumed largely by taxes and, in all likelihood, the money will not be worth as much as it is today due to the probable looming inflation.
By the same token, if you don’t want to invest it in gold or silver, there aren’t too many options. Europe is teetering on the brink of the same fiscal cliff we are teetering on so, investing offshore doesn’t provide any better safety or security.
I think your best bet would be to talk to a financial advisor. This is a tricky issue.