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When to take pension?
Old 09-24-2010, 09:40 AM   #1
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When to take pension?

My wife has a couple of options on when and how to take her pension. There are various survivor benefit's , ect. She can start taking her pension on July 1, 2011 and receive $72,092, or she can start it on December 1 2011 and receive $75,098. This is a 100% survivor benefit and the pension has cost of living increases.

So basically would you give up the $30,040 in early payments for the $3006 a year in increased payments. I would assume yes, but just checking to make sure I am not missing anything. In 2011 I will be 54 and my wife 50.
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Old 09-24-2010, 10:27 AM   #2
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I am very impressed. I don't think I ever met anyone who had a pension benefit that high with 100% survivor benefits at age 50. No Federal pension has that benefit.

:gre etings10:
she didn't work in Bell CA did she ?
:greetings1 0:

More seriously, yes its a no brainer to wait.
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Old 09-24-2010, 10:45 AM   #3
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They seem to be actuarially equivalent. How are the longevity genes in your respective families?
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Old 09-24-2010, 11:52 AM   #4
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It looks to me like you are buying a joint and 100% survivor COLA'd annuity at ages 50/54 and getting an initial annual benefit of 10% of your premium. That's at least twice the payout I saw the last time I looked for quotes on private SPIAs. I'd defer.
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Old 09-24-2010, 12:10 PM   #5
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Wait 6 months for the 5% raise imho. Breakeven point is only 10 years, right?

If COLA is a percentage, the more the pension, the more $$ from the COLA, too.
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Old 09-24-2010, 01:16 PM   #6
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Old 09-24-2010, 01:33 PM   #7
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Originally Posted by Independent View Post
It looks to me like you are buying a joint and 100% survivor COLA'd annuity at ages 50/54 and getting an initial annual benefit of 10% of your premium. That's at least twice the payout I saw the last time I looked for quotes on private SPIAs. I'd defer.
Also a meaningful step up from what you get from deferring SS.

Ha
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Old 09-25-2010, 12:05 PM   #8
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It sounds like the decision as to whether to take Social Security soon rather than later. If you are healthy then wait until December. The extra monthly income will pay off.
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Old 09-25-2010, 03:29 PM   #9
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She wont be eligible for Social Security, or it will be reduced. She has basically paid in close to 15% of her salary and her employer matched it, for close to 30 years. She is going to retire in July, but if she waits till December she will qualify for the 80 and out rule and be able to get $3,000 more a year.

I wish that I would have had this option, but I'll just have to hope I get something from Social Security when the time comes, of coarse it will not come close to matching this, but she paid in quite a bit more also.

Since the plan has survivor benefits, I think the odds of one of us living long enough for it to pay off are good. If not the kids will get a little less.
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