Hey guys! I’m trying to help my (Future) Mother-In-Law with a financial problem she has going on and I could use some advice.
My MIL is 61 years old and unfortunately she and we lost her husband back in January. He worked for a while for the State of Ohio and now she is entitled to Survivors Benefits through his old OPERs pension. The amount is $27,437 and we have narrowed the repayment to one of two options.
Take a lump sum of the amount and likely end up around $21,949 after taxes (20%). From there I am imploring her to work with a FP to invest the money in mutual funds for at least 10 years. Assuming a 10% RoR the $21,949 should become about $57K in 10 years I think.
OPERs offers a plan where once my MIL is 62 (8 months) she would be able to take in $677.32 a month until the total amount of the benefit is recouped which is about 3.333 years. After that she would receive the $677.32 for the rest of her life. After 9 years that would amount to roughly $58,500 post tax.
My MIL said this information was given to her by a case worker at OPERs and she couldn’t provide any written information as the website was down. Option 2 sounds far too good to be true.
Additional background: – My MIL brings in about $3000 per month post tax from a pension and part time work – My MIL has no debt aside from her house which has a $60,000 balance and is ~$400/mo – MIL has no retirement accounts aside from the pension
TLDR: MIL lost her husband in January. OPERs survivor benefits needs to pay out to her. Options are a lump sum of $27,437 or $677.32/mo until she passes.