Most people hope to walk into retirement with a nice little nest egg. But what if you’re staring down a $1.6 million check and wondering, Should I take it — or let the pension ride? That was the exact dilemma one New York City couple brought to Dave Ramsey.
Melissa called into "The Ramsey Show" to talk about her husband's upcoming retirement and the "final papers" in front of him. At 55 years old, he had a choice: take a $1.6 million lump sum now, or stick with traditional pension payments that would end upon death — or shortly after.
Ramsey didn't hesitate. "There’s very few times, folks, that you won’t take the lump sum on a pension," he said. "And that's the reason — 'cause you lose it all when you die. That's it. You get zero."
Don't Miss:
- Warren Buffett once said, "If you don't find a way to make money while you sleep, you will work until you die." Here’s how you can earn passive income with just $10.
- $100k+ in investable assets? Match with a fiduciary advisor for free to learn how you can maximize your retirement and save on taxes – no cost, no obligation.
The couple had been offered various survivorship options, including a 100% benefit to Melissa. But Ramsey wasn't impressed. "It only survives one generation past you, though. After that, it’s gone," he said.
He walked them through the math. If they rolled the lump sum into a traditional IRA and invested it in a solid mix of mutual funds — not touching the money — Ramsey said, "It'll double about every seven years."
Then came the eye-opener:
"You know, it's going to be $3.2 [million] after 7 years. At 69, it would be about $6 [million], and at 76 it’ll be… 14."
Melissa's reaction: "Holy mackerel."
Ramsey: "And that all goes to your kid. And their kid's kiddos. And so on."
Trending: It’s no wonder Jeff Bezos holds over $250 million in art — this alternative asset has outpaced the S&P 500 since 1995, delivering an average annual return of 11.4%. Here’s how everyday investors are getting started.
Compare that to the pension plan, he said, and it's no contest.
"100% of the time, [that money] does not go to them if you leave it in this stinkin' pension."
Ramsey also acknowledged Melissa's concern about market volatility. She mentioned the 2008 crash and the chaos of COVID. Ramsey reminded her of history.
"The Dow went down to 6,500 in 2008. ‘It's at 35,000 this week,' Ramsey said. Before you question the number, that was in 2021. For reference, the Dow's now around 44,829 in 2025, so his point held up."
He told her to zoom out and look at how the market rebounds after events like 9/11, Black Monday, and even Sputnik.
"You've got to get those numbers kind of down in your heart, or you’re going to freak out with this idea."
He capped it off with this advice:
"You roll it in a direct transfer traditional IRA… invest it in a good mix of mutual funds… and 100% of that money will pass to your heirs. It will not be left behind with a pension plan."
Ramsey didn't just frame it as a financial decision — he made it emotional, generational, and legacy-driven. And in his words, "It's easy math."
Read Next:
- If You're Age 35, 50, or 60: Here’s How Much You Should Have Saved Vs. Invested By Now
- Over the last five years, the price of gold has increased by approximately 83% — Investors like Bill O’Reilly and Rudy Giuliani are using this platform to create customized gold IRAs to help shield their savings from inflation and economic turbulence.
Image: Shutterstock
