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Old 09-20-2016, 10:20 PM   #21
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Originally Posted by laurence View Post
What do you think the inflection point is? My pension is small but larger than this, I'm taking the about $1000/month at age 55 until I take social security, no COLA, option - work froze the plans a couple years ago, I'm 42 now. I chose this because it felt nice to pad the income until social security kicks in and reduce the withdrawal amount on my portfolio by about 10% for those seven years.

I really do not know... it is different for different people... I just think size does make a difference in the decision making...

I do not think $1,000 a month is a small pension... not big either mind you...

My mom has a pension (from my dad) that is $109 per month... it started 40+ years ago at $45 per month... she was lucky as they would make increases along the way, but usually had a $5 per month minimum... so it kept going up... I think this is small and would have recommended her take a lump sum (but, who knows for sure as the lump sum might have been much worse back then)...

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Old 09-21-2016, 05:19 AM   #22
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The pension is far better than a commercial annuity (6.3% payout). Assuming an average lifespan the OP would have to average 5.6% annual interest on the lump sum to match the pension. So I'd probably go with the pension and just treat it as some nice fixed income.

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Old 12-09-2016, 03:37 PM   #23
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The payout amount of $6,372 was higher than what was originally estimated.

I rolled it over into a new IRA at Vanguard and invested it in Vanguard's FTSE ex-US Small Cap fund. We'll see how it performs over the next couple of decades, but it's going to be tough to compare performance to the annuity, since I don't know what I would have received if I went that route. I'm think it would probably be higher, since the payout amount was bigger than estimated.

As for setting up the account at Vanguard, I mailed them the check on Friday, which they received on Monday and immediately deposited into the account. That was a quicker turnaround time than I expected.

Unfortunately, they deposited the funds into the wrong IRA account. It took me a couple of days to get this sorted out with them. Originally, they were telling me it would take up to four weeks to correct this error, which was made on their end. After some complaining, they expedited the issue and it was taken care of by the next day.

I feel for others that would have to wait, which, as I mentioned to the Vanguard rep, is completely unacceptable for a financial institution. He mentioned that the department that handles these issues have a large backlog and he wasn't too happy about it either. Lucky for me I was able to get this dealt with quickly.
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Old 12-09-2016, 05:08 PM   #24
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Early in 2016, the company I worked for in the '90s tracked me down (nice of them!) and said that its defined benefit (non-COLA) pension plan could pay me $260/mo starting next year (age 55) or $520/mo starting at age 65, with a linear sliding scale for starts between age 55 and 65. I had written off any chance of getting a pension from the old megacorp since the company is now a microcorp after divestitures and mismanagement in the '00s. The letter didn't offer a buyout. There are a remarkable 30,000 people with a finger in this company's defined benefit pension plan. They stopped offering a defined benefit pension plan to new employees a couple of years before I left the company in 2000.

I have no idea what probability to assign to this company's estimate of the eventual payout. 100%? 75%? 50%? 25%? 0%? Can they arbitrarily cut the payout if their investment returns are below expectations? What regulations govern the management of defined benefit pension plans?

$6k annually pays for a nice annual vacation, assuming that I live long enough to start collecting at age 65. Even $3k annually takes most of the bite out of an annual vacation. I haven't yet decided what to do with this 'found' income stream. I much prefer 'found' income streams over 'found' expense streams.
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Old 12-09-2016, 06:21 PM   #25
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Originally Posted by socca View Post
I had written off any chance of getting a pension from the old megacorp
socca, since you didn't expect it, if I were you I would take it now and treat it as an annual $3K vacation fund.
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Old 12-09-2016, 08:30 PM   #26
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Originally Posted by braumeister View Post
socca, since you didn't expect it, if I were you I would take it now and treat it as an annual $3K vacation fund.
X2, a nickel today is better than a dime later which may not materialize.

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