Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Pension Options
Old 09-11-2008, 09:27 AM   #1
Confused about dryer sheets
 
Join Date: Nov 2007
Posts: 4
Pension Options

I plan to take my pension in October when I turn 55. The 2 options I am considering are to take $1324 per month for life with 100% and Survivor benefits or take $2113 until 62 then it drops to $638 per month also with 100% Survivor benefits.I have another full time job so I plan to save this pension income for 5 years and they retire completely. What do you think would be the best option? I realize a big factor is how long will I live. I would appreciate any advise you might have.
__________________

__________________
Hurley is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 09-11-2008, 09:31 AM   #2
Thinks s/he gets paid by the post
Coach's Avatar
 
Join Date: Nov 2005
Location: Colorado, USA
Posts: 1,127
Hi Hurley, and welcome to the forum.

Is the pension COLA adjusted, or will it still be paying $1324 20 years from now?

Coach
__________________

__________________
Coach is offline   Reply With Quote
Old 09-11-2008, 09:35 AM   #3
Confused about dryer sheets
 
Join Date: Nov 2007
Posts: 4
The pension is not COLA adjusted, so will it still be paying $1324 the rest of my life.
__________________
Hurley is offline   Reply With Quote
Old 09-11-2008, 09:38 AM   #4
Thinks s/he gets paid by the post
OAG's Avatar
 
Join Date: Jun 2006
Location: Central, Ohio, USA
Posts: 2,598
Welcome to the board.

A lot depends on so many variables, do you want to draw the most money, what are your plans for taking SS at what age, what will your spouse draw in benefits either from work or SS, is there a large age differential, COLA (as already mentioned), other assets available and expected return(s), expenses expected in retirement, medical benefits needed or provided. I have worked on a spreadsheet that takes all of that into consideration for DW and myself and I find that it needs constant revision however that is the only way I know of to adjust all the variables that are unique to our situation.

Opps, I was posting while you were typing.
__________________
Vietnam Veteran, CW4 USA, Retired 1979
OAG is offline   Reply With Quote
Old 09-11-2008, 10:30 AM   #5
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
What happens if you defer tapping it? Some continue to grow and some do not. Since you have another fulltime job with adequate income that mey be an option and no taxes to be paid. Also, do you have a cash out option and the ability to roll to an IRA? What do survivor options look like cost wise?
__________________
crazy connie is offline   Reply With Quote
Old 09-11-2008, 11:06 AM   #6
Confused about dryer sheets
 
Join Date: Nov 2007
Posts: 4
It will increase 4% per year until age 62 if I don't take it at 55. I donot have a cash out option.
__________________
Hurley is offline   Reply With Quote
Old 09-11-2008, 11:14 AM   #7
Confused about dryer sheets
 
Join Date: Nov 2007
Posts: 4
If I wait until 62 the amount would be $1738 per month per the companys calculations.
__________________
Hurley is offline   Reply With Quote
Old 09-11-2008, 11:57 AM   #8
Thinks s/he gets paid by the post
 
Join Date: Feb 2006
Posts: 1,183
If the wages in the new job are decent you might be bumping your tax bracket and paying a good bit in taxes only to invest it. Can you get a better than 4% rate of return after the tax hit? It might be nice to have a larger monthly sum later rather than cash in the bank. I know some of the math wizards might be able to help you better on this than I can. Just a thought and worth consideration if you and spouse have a good life expectancy.
__________________
crazy connie is offline   Reply With Quote
Old 09-11-2008, 12:08 PM   #9
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,642
Don't forget to evaluate the tax implications. Most pension income is taxed as regular income so if you are in a high bracket while working you can kiss some goodbye. When you turn 62 and income drops the pension income may be taxed at a substantially lower rate.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 09-12-2008, 08:07 AM   #10
Thinks s/he gets paid by the post
Texarkandy's Avatar
 
Join Date: Feb 2008
Posts: 1,281
Sometimes life insurance is cheaper than a "survivor" option.
__________________

__________________
Retired 2009!
Texarkandy is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
options help twaddle Stock Picking and Market Strategy 15 12-06-2007 07:28 AM
help with pension options for my MIL WM FIRE and Money 23 05-08-2007 10:37 PM
Term Life on Pension rather than Benefit options? Maneiac FIRE and Money 14 01-04-2007 04:55 PM
VG Options kenepp1 FIRE and Money 6 11-02-2005 02:41 PM
SS options in firecalc wzd FIRE and Money 4 02-16-2003 10:46 AM

 

 
All times are GMT -6. The time now is 01:02 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.