5. Pay Off All Debt and Don’t Finance Anything
Most companies maintain debt as part of a solid corporate finance strategy. Financially successful families might be better off pursuing a similar strategy instead of focusing efforts on debt reduction. As your assets grow, the amount of good debt you carry can grow also.
For some people holding debt makes sense but if you’ve had a problem with debt in the past, or you currently have a high debt-load, don’t go into retirement with large debt payments. If you’re net worth is higher, holding some debt might make sense.
6. Take the Lump Sum
Many companies that offer a pension offer a lump sum payout option. Many people assume they are better off in control of the money and that they can earn a decent rate of return by investing that money. Pension plans are professionally managed, and when viewed in terms of possible outcomes and life expectancy, the lump sum option may not be the best choice.
Your retirement funds are not where you learn to invest. If you will take a lump sum, give it to a financial adviser with a track record of proven returns or don’t take the lump sum.