Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-24-2012, 12:22 PM   #41
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
I would vote for a survivor benefit close to the 100% . The issue of managing a payout at an advanced age is not a small one. Seniors ARE being cheated in large numbers and it's sickening to see.

I have been doing volunteer tax preparation with AARP this year at our local library and I am appalled at the churning of brokerage accounts and the inappropriate investments I see on clients' brokerage statements. The most egregious seem to be from Wells Fargo.

These folks are typically in their mid-80's with a several hundred thousand dollar portfolio and they have no idea what is being done to their accounts. I probe the situation with a couple questions to see if it's worth suggesting they do more research about other options or whether they have a savy family member that might be able to help them straighten things out. Mostly I just get a deer in the headlights look.

I have to be careful about suggesting specific solutions to people but I sent a retired accountant (86, very sharp) and his wife off in the direction of Vanguard yesterday. He was fuming when I started pointing out what was going on in his account let alone the nearly $4,000 in fees they were paying. For 2011, they had a $20,000 gain due to some stock sales which could have wreaked havoc on their taxes but luckily did not. The account owner had no idea why the sales had been made which created the gain.

Since we were in the library, I suggested he go check out one of John Bogle's books to understand more about Vanguard, etc. and gave him the website address. He was going to call his broker to ask him why he had made the sales, but I advised him to not waste his time. All he was going to hear was "waa, waa, waa, waa, waa." Instead, I suggested, he put the question in a letter and refuse to accept anything other than a written response.

Very, very frustrating to see so many folks being ripped off.
__________________

__________________
Buckeye 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 03-24-2012, 12:40 PM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Moemg's Avatar
 
Join Date: Jan 2007
Location: Sarasota,fl.
Posts: 10,038
I also vote for a survivor benefit of at least 50% . My husband died after two years in retirement . He luckily for me had opted for a survivor benefit of 60% which was tied to health care . It allowed me to just grieve without immediately worrying about financial issues . I had invested for years and handled most of the bills but you would be surprised at how extreme grief fogs your mind . After a month I returned to my part time job and continued working part time until I retired . My salary plus the survivor benefit covered all my expenses including tuition for a college age daughter .
__________________

__________________
Moemg is offline   Reply With Quote
Old 03-26-2012, 11:28 AM   #43
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,739
Send a message via Skype™ to kcowan
We had to make this decision 20 years ago. We took our respective life expectancies and calculated the amount of term insurance that would be needed to cover the pension loss for only those years. The premium turned out to be very close to the difference in the pension so we took the 100% joint survivorship because it also included benefits.

One little wrinkle is that if you split up after retirement, you cannot change the benficiary of the pension. It is struck actuarially at the time of retirement. This is probably good.
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 03-26-2012, 07:06 PM   #44
Dryer sheet aficionado
 
Join Date: Jan 2008
Posts: 48
+1 I took 75% option for DH. Mine reverts back to single if he passes before me as well. We could have looked at a term life insurance policy, but prices would most likely keep going up at the end of each term as we got older.
__________________
sn2792 is offline   Reply With Quote
Old 03-26-2012, 07:32 PM   #45
Recycles dryer sheets
 
Join Date: Aug 2011
Location: Atlanta
Posts: 420
Quote:
Originally Posted by Texas Proud View Post
This has been discussed a few times.... do a search and you might find a thread...

But a quick reply.... we looked into that with my sister's pension... and determined that the cost of insurance was about the same as the reduction in benefits... .
that is what I found almost identical so we decided to let my wife get full benefit
if I die.
__________________
SJ1_ is offline   Reply With Quote
Old 06-11-2012, 09:31 AM   #46
Confused about dryer sheets
 
Join Date: Jun 2012
Location: Detroit
Posts: 5
My husband is retiring in a few weeks. I do not need his pension, as mine is $38,000/year, going up $1000 annually. We have 1.1 m in 401k/savings. If he chooses 50% survivor, his pension would be only 129/ less per month. I would get $833 per month, which I really don't need. We have no children, so everything will go to charity. He does have some health issues, but his Dad lived to 86. I just don't want to be foolish and give up half his pension, which would be essentially costing us around $1500/year.

My gut tells me if I don't need it (he will be getting half my retirement for health ins reasons.), we should just forget about it and get more now, even though it's not much.
__________________
Linda1652 is offline   Reply With Quote
Old 06-12-2012, 12:29 PM   #47
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,739
Send a message via Skype™ to kcowan
Linda
Since this decision is not based on need, you need to make the best financial decision. Take the number of months from retirement until his life expectancy times $129. That is the total cost of the policy. Then the difference between his life expectancy and yours in months times $833. If the latter total is higher, take the survivor pension.

There is some discounting to be applied to the $833 but with current interest rates being so low, you can ignore it.
__________________
For the fun of it...Keith
kcowan is online now   Reply With Quote
Old 06-12-2012, 03:17 PM   #48
Confused about dryer sheets
 
Join Date: Jun 2012
Location: Detroit
Posts: 5
Quote:
Originally Posted by kcowan View Post
Linda
Since this decision is not based on need, you need to make the best financial decision. Take the number of months from retirement until his life expectancy times $129. That is the total cost of the policy. Then the difference between his life expectancy and yours in months times $833. If the latter total is higher, take the survivor pension.

There is some discounting to be applied to the $833 but with current interest rates being so low, you can ignore it.

Thank you so much. It was very simple and easy to do---I should have thought of it. Since I do expect to outlive him by at least 8 years, it was pretty much a no brainer. I have had 3 curable cancers, but don't expect it to kill me. He has an aortic root aneurysm, that hasn't changed in 20 years, but you never know. I had decided yesterday it would be foolish to not take a pension that he worked almost 43 years for!! My next dilemma is choosing the 75% option, which is $58/mo more!
__________________
Linda1652 is offline   Reply With Quote
Old 06-12-2012, 03:47 PM   #49
Thinks s/he gets paid by the post
 
Join Date: May 2006
Location: Largo
Posts: 1,945
Quote:
Originally Posted by Linda1652 View Post
I had decided yesterday it would be foolish to not take a pension that he worked almost 43 years for!! My next dilemma is choosing the 75% option, which is $58/mo more!
I agree to not let the pension die with him for the reason you state! My mom is single and that's what will happen to her pension. She needs to live to a ripe old age to get a good return on her contributions.
__________________
Buckeye is offline   Reply With Quote
Old 06-12-2012, 04:09 PM   #50
Confused about dryer sheets
 
Join Date: Jun 2012
Location: Detroit
Posts: 5
Quote:
Originally Posted by Buckeye View Post
I agree to not let the pension die with him for the reason you state! My mom is single and that's what will happen to her pension. She needs to live to a ripe old age to get a good return on her contributions.
I told him this will guarantee that he lives longer than me!! Thank goodness for message boards. Sometimes my brain just can't think clearly, and needs a little help! In the scheme of things, we probably won't even notice the difference per month. He gets 50% of my teacher pension, which is $190/mo less than if he got nothing. We don't even notice. And, I would rather the extra money go to charity instead of his company keeping it. Or, I may lease a Lexus instead of driving my old Honda!Seriously, I do hope he lives a very long life!
__________________
Linda1652 is offline   Reply With Quote
Old 06-12-2012, 05:02 PM   #51
Full time employment: Posting here.
 
Join Date: Dec 2010
Posts: 746
We each took single life and with the some of the difference between single life and survivorship we each took out a universal life insurance policy naming each other as beneficiary with the kids as contingent beneficiaries. The reason(s) are, in both our pensions, once you select survivor the beneficiary cannot be changed. Also, we both have longevity in our families, including good health, and we wanted to maximize our cash flow.

Just a few other things to consider.
__________________
East Texas is offline   Reply With Quote
Old 06-12-2012, 06:05 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,384
Quote:
Originally Posted by Linda1652

I told him this will guarantee that he lives longer than me!! Thank goodness for message boards. Sometimes my brain just can't think clearly, and needs a little help! In the scheme of things, we probably won't even notice the difference per month. He gets 50% of my teacher pension, which is $190/mo less than if he got nothing. We don't even notice. And, I would rather the extra money go to charity instead of his company keeping it. Or, I may lease a Lexus instead of driving my old Honda!Seriously, I do hope he lives a very long life!
Most teacher couples I know go the 50% option on each other, but they did not have the assets you have. As I mentioned I am very conservative, but with pensions, you have that luxury to be. Since that $130 a month or whatever it was it not taking food off your plate, I feel it is a very prudent thing to do. As for the 75% option, it is just deciding what kind of icing you want on the cake, based on your posted assets, and income needs.
__________________

__________________
Mulligan 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
Asset Allocation in Retirement: 100% in stocks??? Orchidflower FIRE and Money 104 08-17-2012 05:37 PM
Scoring of "Millionaires Tax" proposal only brings in $47B over 10 years MasterBlaster FIRE Related Public Policy 57 03-25-2012 03:21 PM
Not relevant to daily life but neat to see Walt34 Other topics 2 03-15-2012 11:34 AM
The Founding Virtues and the Stuff of Life Midpack Other topics 3 03-11-2012 02:48 PM

 

 
All times are GMT -6. The time now is 07:19 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.