3 Approaches to Maximize Your CCHMC Pension Plan Benefit

Choosing between a lump sum or annuity in the CCHMC Pension Plan is a one-time decision with lasting impacts. Let the experts at Cerity Partners help you explore the vital considerations for this critical choice.

Life is filled with big, consequential decisions: Where to go to college? Whom to marry? What job to take? Which house to buy? Most of us manage to muddle our way through, living with the consequences of the decisions we’ve made, sometimes with regret, sometimes with satisfaction.

If it turns out the decision wasn’t a good one, we may be able to have a “do-over.” Divorce in the case of a lousy marriage; resignation and re-employment if a job isn’t right; sale and purchase for a faulty home choice. Less likely is re-enrolling in college, but even that’s possible if you’re up for multiple degrees.

When choosing how to take your CCHMC Pension Plan benefit, it’s a one-time big decision—lump sum, or annuity. CCHMC doesn’t give you a “do-over” if you change your mind years later. And with interest rates rising, for many near-retirees, it’s less and less certain that the lump sum is the right choice.

So, how do you make the right decision for your situation? We’ve assembled a list of issues to consider. As you contemplate them, we’d suggest the following approach to decision-making:

1 Evaluate your choices from diverse perspectives: This is an emotional decision as much as it is financial. How will this impact your heirs? Is it important to leave funds to a spouse or children? Would your spouse be better equipped to manage a monthly annuity vs a large lump sum? These are questions that may not cross your mind for 20 years, but must be considered now to ensure the appropriate decision is made.
2 Think about both near-term as well as longer-term implications: What percentage of your retirement income needs will social security meet? What about when you add in a spouses pension or social security? Next when we consider the CCHMC pension as an annuity, would the addition of that amount meet or exceed your income needs? Depending on your specific situation, the flexibility of a lump sum may be more favorable, as well. In depth financial planning will provide the quantitative analysis to help you determine what is most prudent.
3 Consider the risk of longevity and investment risk: Longevity refers to living longer than initially anticipated or planned for. In this case, the annuity option may make sense because you would receive a consistent monthly stream of income regardless of living to age 80 or 120. In regards to investment risk, this refers to the responsibility one would have to properly manage the lump sum funds on their own and distribute them proportionally over your lifetime to ensure you do not ‘run out of money’.

We encourage near-retirees to assess their choice intentionally, cognizant of the pros and cons of each alternative and decide what’s best for them and their family. We also believe that discussing one’s situation with a trusted financial advisor whose fiduciary obligation is to put your interests first can be very helpful. Let’s talk!

Meet Ryan Eversole

Ryan is a Principal in the Cincinnati South office. He works with a team of specialists to help provide clarity to executives, high net worth...Read more

Meet Ryan

Cerity Partners does not have an ongoing relationship with Cincinnati Children’s Hospital Medical Center (CCHMC), nor an agreement to provide services to employees of CCHMC. Cerity Partners is not affiliated with or endorsed by CCHMC. Cerity Partners and CCHMC are separate and unrelated companies.

Please read important disclosures here.

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3 Approaches to Maximize Your CCHMC Pension Plan Benefit

Choosing between a lump sum or annuity in the CCHMC Pension Plan is a one-time decision with lasting impacts. Let the experts at Cerity Partners help you explore the vital considerations for this critical choice.

Evaluate your choices from diverse perspectives

Think about both near-term as well as longer-term implications

Consider the risk of longevity and investment risk

Meet Ryan Eversole

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Evaluate your choices from diverse perspectives

Think about both near-term as well as longer-term implications

Consider the risk of longevity and investment risk

Meet Ryan Eversole

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