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AZA Capital Management

Pension decision

Lump sum or monthly pension? Check the math first.

It's a choice that is often permanent. Enter the figures from your benefit packet to see the return your lump sum would need to match your pension, and how long the money could last.

Try the pension analyzer

A 5-minute check, with results right away and no email required.

Example
Lump sum amount
$500,000
Monthly pension (single life)
$3,000
Your age
65
Cost-of-living adjustment
None

To match this pension over an expected lifetime, the lump sum would need to earn about 3.9% a year.

How it works

  1. Step 1

    Open your benefit packet

    Everything you need is there: the lump-sum offer, your monthly pension (and the survivor amount if you're married), any cost-of-living adjustment, and your deadline.

  2. Step 2

    Enter a few figures

    One topic per screen, with help along the way.

  3. Step 3

    See your results

    The return your lump sum would need to match your pension, and how long it could last at three hypothetical returns.

The analyzer doesn't tell you which to choose. It shows the trade-offs so you can decide.

Try the pension analyzer

A 5-minute check, with results right away and no email required.

Example Sample pages from the pension analyzer report
The full picture in your report. Income certainty, flexibility, survivor protection, and what's left for your family, if you'd like the report emailed.

Why AZA?

Value-seeking and adaptive

We build your portfolio around your goals and lean toward what looks attractively valued as conditions change.

Direct access

You can talk directly with the people who make the investment decisions, by phone, email, or in person.

Employee-owned

We're owned entirely by the three principals who shape our investment decisions, so we take a personal interest in every client.

Fiduciary, fee-only

We're legally bound to act in your best interest, and we're paid through advisory fees, never commissions or product sales.

Independent

We have no ties to a bank, brokerage, or insurance company, so our advice isn't shaped by a parent company's interests.

Third-party custody

Your accounts are held at an independent qualified custodian, which provides built-in checks and balances.

Example

A lump-sum offer with a deadline

Diane is 61 and an engineer at a Michigan utility. She plans to retire next year, and her benefit packet offers a choice between a monthly pension and a one-time lump sum, with an election deadline in 90 days. She's married and also has a 401(k) and shares of company stock.

Fictional client examples provided for illustration only.

  1. First conversation

    Diane runs the pension analyzer on our website, then books a 30-minute introductory conversation. She shares the details of her benefit packet, and we talk through her goals and her family's, along with her 401(k) and company stock.

  2. Baseline and proposal

    Her risk profile shows high capacity (a long timeline and solid savings), medium tolerance, and high composure. Our written proposal lays out the pension decision side by side: the survivor options, what each choice means for taxes and for their heirs, whether special tax rules for company stock held in a 401(k) (known as net unrealized appreciation) could apply, and when keeping the pension may be the better choice. It also explains how we're paid and discloses our conflicts of interest. With the trade-offs laid out, the decision is hers. She chooses the lump sum and rolls it over, along with her 401(k).

  3. Building the portfolio

    Since the special tax treatment wouldn't help much in her case, her 401(k), including the company stock, and the lump sum move directly into a rollover IRA that we help her open at an independent qualified custodian. A direct rollover from pre-tax accounts to a pre-tax IRA generally isn't a taxable event. A large position in one company's stock carries more risk than her baseline allows, and since sales inside the IRA aren't taxed, we reduce it at a pace set by her risk profile rather than taxes. The adaptive core of her portfolio responds to market conditions within the ranges we agreed on.

  4. Revisiting as life changes

    When her husband retires, we revisit their profile together and reset the baseline if their needs have changed.

Common questions

Mike LaFontaine

Partner / Head of Advisory Services

Start with a conversation

A no-obligation, 30-minute introduction with investment people, not salespeople. If it seems like a fit, we'll follow up with a written proposal.

Schedule a conversation 312-429-0880