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# Hello. My wife, who is 38 yrs old, worked in Japan for 10 yrs

Hello. My wife, who is 38 yrs old, worked in Japan for 10 yrs and recently quit to come to the US. She has two choices with her national pension fund (equivalent to US Social Security).

1. Leave it and get 40,000YEN (about \$400 in 2013 dollar) a month starting from her 60th birthday until she dies.

OR

2. Break it now and get 830,000YEN (about \$8,300 in 2013 dollar) in lumpsum.

Which would likely be a better option considering avg 2%+ US inflation, current Currency rate, 5% ROI, 22 Yrs left to retire.

Megan C :

Thank you for question, and thanks for using JustAnswer.com

Megan C :

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Megan C :

Your wife can take \$8,300 now, or \$400 a month from age 60 to death.

Megan C :

Your wife would essentially receive the same \$8,300 within 1.72 years of taking her benefit, so in the end she will get more from holding off until retirement.

Megan C :

Realistically, the \$8,300 today will not grow by much in the marketplace. Rates are very low, so there's little incentive to get the money now and watch it appreciate

Megan C :

If you do a simple calculation and compare the payment option vs the lump sum, you will see that the payment option is more attractive.

Megan C :

Let's just assume that your wife lives to age 65. The present value of the annuity is \$21,821 assuming a 5% ROI. That's over two times -nearly three times - the present value of \$8,300 which is, \$8,300

Megan C :

If your wife lives to age 70, the present value skyrockets to over \$38,000.

Megan C :

Clearly taking the annuity, provided that your wife is healthy and expects to live well into her retirement, is the better bet.

Megan C :

Megan C :

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Customer:

Thank you!

Megan C :

You're welcome

Megan C :