My company provides a reduced benfit pension for those that choose to retire early. I will be taking advantage of that in the next year or so (happy 55 bday to me next week!!).
There are several different options available for the non COLA pension and I would like some opinions on one of those options.
I can elect to have my pension "levelized". The company will provide extra money from 55 to 62 at which time the amount of the pension will be reduced by the amount of SS that is available.
Example
Straight pension at 55 is 31000 per year until death.
Levelized pension at 55 is 43000 per year until 62.
At 62 the pension is 23000 per year until death.
Although the above number are approximate, they are pretty close. I have run some spreedsheet calculations and the "break even" point is around 69 years old. I come out with more total dollars prior to 69 and fewer total dollars after 69.
So, the question is...which would you choose, straight pension and look forward to the SS income raise at 62 or the levelized option
Most of my co-workers have taken the levelized option as recommended by their finanical planners. Take the most now, seems to be the prevailing choice. My concern is that this option is based on what the SS is estimated to be at 62, not what it actually will be or could be further into the future. The pension amount is not adjusted in the future if SS should be reduced by new taxes, elegibility for SS benfit moved to 64, or any number of other things that the government may do.
Any and all comments are encouraged and appreciated. This one's taken up a lot of my meager mental capacity....
Thanks
Bandit
There are several different options available for the non COLA pension and I would like some opinions on one of those options.
I can elect to have my pension "levelized". The company will provide extra money from 55 to 62 at which time the amount of the pension will be reduced by the amount of SS that is available.
Example
Straight pension at 55 is 31000 per year until death.
Levelized pension at 55 is 43000 per year until 62.
At 62 the pension is 23000 per year until death.
Although the above number are approximate, they are pretty close. I have run some spreedsheet calculations and the "break even" point is around 69 years old. I come out with more total dollars prior to 69 and fewer total dollars after 69.
So, the question is...which would you choose, straight pension and look forward to the SS income raise at 62 or the levelized option
Most of my co-workers have taken the levelized option as recommended by their finanical planners. Take the most now, seems to be the prevailing choice. My concern is that this option is based on what the SS is estimated to be at 62, not what it actually will be or could be further into the future. The pension amount is not adjusted in the future if SS should be reduced by new taxes, elegibility for SS benfit moved to 64, or any number of other things that the government may do.
Any and all comments are encouraged and appreciated. This one's taken up a lot of my meager mental capacity....
Thanks
Bandit