I am not looking to collect now but want to start budgeting and need to give my accountant the breakdown of my 401K and my pension. He asked me what my pay out monthly rate would be?
Your employer is required to provide you with a plan statement at least once every 3 years which will list your monthly benefit at retirement but many plans provide such statements annually.
These guys nailed it. However, I'm sure the real reason you asked is because you would rather know if taking the lump sum makes more sense than taking the annuity payments.
In order to answer that question, I refer clients to this free online calculator http://www.free-online-calculator-use.com/present-value-annuity-calculator.html
It explains how to use the calculator and then you can plug in your own situation and find out how much you should be receiving if they offer a lump sum.
Very smart to be thinking ahead but be careful. Highly recommend that you engage a fee-only advisor to join into your conversation on planning.
Are you referring to “budgets” in terms of your current standard of living or in terms of income streams? If you are moving into retirement a pension may provide a consistent and reliable income stream for the rest of your life and your spouse’s life. Notice that I say “may” as some pension plans are in trouble, as is the PBGC. http://essigman.com/blog/?p=204
Your CPA may be evaluating your pension and 401(k) in terms of budgets and taxation. What about anticipated return, liquidity, inflation, and risk. A very real problem with distributions from savings is running out of money. An annuity (moving your 401(k) into self-funded pension) may resolve some of this albeit at a very high cost. Healthcare costs and risk may be your one single largest expense in retirement… have you or your CPA added this as a non-discretionary budget item?
Don’t mean to be hating on CPA’s as they provide a very valuable and necessary service. Financial planning encompasses their expertise as taxes on defined contribution and defined benefit plans will eat away at your income. Consider that planning is multi-dimensional and should also include a discussion on how best to utilize your savings, where and how to invest, what types of insurance you need, as well as an appropriate legal structure.
I generally discuss a client’s situation with a CPA in addition to an insurance agent and an attorney. Don’t plan your next 30 or so years in a vacuum.