What Choice To Make For Defined Benefit Supplement (DBS) Upon Retirement?

[Patty C.]

What would you do if you had a defined benefit supplement (DBS)? Would you take a lump sum? annuitize it of a period certain? annuitize for life? roll it over to a 403(B)/401(K)? roll it over to an ira?

Lump sum puts me into a much higher tax bracket.

Annuitize it over a period certain would provide a 6.79% return of the savings.

The annuity monthly payment deteriorates with inflation.

Rollover to a 403(b) plan limits options to mutual funds. The benefit, however, is being able to borrow 50% of what is in the account (up to $50K with 5 years to pay back if used to buy a primary residence.

Rollover to traditional and Roth ira only allows for traditional paper assets: stocks, bonds, mutual funds, ETF etc.

Rollover to SDIRA allows for investments into traditional paper assets and alternative assets.

What do you think about doing a rollover to an ira and strategically transitioning it to a Roth IRA to JV? keep it in the ira and use it when a real estate deal can offset the taxes generated when money is distributed? What would you do? Thank you for any suggestions and thoughts.

[Steve Vaughan]

I wouldn't hold real estate in a qualified/ retirement plan. Lots of rules and no depreciation, redundant tax advantages. 

I'd need 9% on an annuity, or about $800/mo per $100k.  Risk-free is paying 4.5%, so 6.7% is too low IMO.  Need to offset the inflation risk better as you mentioned @Patty C.