I had previously intended to take my non cola pension in 2017 at age 55 with joint survivor and payout of $2300/month or $2000/month plus 15% lump of 75,000. Now I am considering taking the social security adjustment option which would give us $3300/month until age 62 and then $1900month or $3000/month until age 62 and the $1500/month thereafter plus the $75,000 lump.
I am rethinking this based on the likelihood that we could be starting our 30 plus years of retirement in a down market. Since the pension is without cola I am thinking we would be getting more upfront while it is still worth more and it would lessen our need to dip into 403b/401k funds early on if the market is down. We will have about $800,000 in 403b/401k, approx. $150,000 in Roth and approx. $300,000 in house proceeds. We have already bought our downsized house and could pay that off when we sell the big house but I think we probably won't, as the interest rate on the new place is only 2.49% and having the money to invest post tax will give us more flexibility to manipulate our taxes. We will be trying to max Roth conversions in the 15% bracket while still getting some ACA subsidy until age 65. I can withdraw penalty free from 403b when I retire at 55. I would like to invest the lump sum in Wellington or Wellesley and look at that as what we will subsidize the drop in pension payout with when we hit the reduction at age 62. We don't plan on taking social security until 70 regardless. I am aware that the net payout from the pension is less when taking the social security adjusted payment, but am wondering if the net effect of keeping more of our money invested tax deferred for longer will still put us in a better position in the long run. I am especially concerned with sequence of return risk as we approach our final landing. We also plan on maxing HSA with catchup until age 65 so long as we stay healthy enough to be on a bronze plan. I am a little uncertain of our expenses once we downsize but I think we can get by comfortably on $50,000/year and possibly less. This would give us some room to do Roth conversions.
I would appreciate any ideas or input on this and can provide more details if needed. Or see my facts in my "Hello" post. Thanks for any help or insight!
I am rethinking this based on the likelihood that we could be starting our 30 plus years of retirement in a down market. Since the pension is without cola I am thinking we would be getting more upfront while it is still worth more and it would lessen our need to dip into 403b/401k funds early on if the market is down. We will have about $800,000 in 403b/401k, approx. $150,000 in Roth and approx. $300,000 in house proceeds. We have already bought our downsized house and could pay that off when we sell the big house but I think we probably won't, as the interest rate on the new place is only 2.49% and having the money to invest post tax will give us more flexibility to manipulate our taxes. We will be trying to max Roth conversions in the 15% bracket while still getting some ACA subsidy until age 65. I can withdraw penalty free from 403b when I retire at 55. I would like to invest the lump sum in Wellington or Wellesley and look at that as what we will subsidize the drop in pension payout with when we hit the reduction at age 62. We don't plan on taking social security until 70 regardless. I am aware that the net payout from the pension is less when taking the social security adjusted payment, but am wondering if the net effect of keeping more of our money invested tax deferred for longer will still put us in a better position in the long run. I am especially concerned with sequence of return risk as we approach our final landing. We also plan on maxing HSA with catchup until age 65 so long as we stay healthy enough to be on a bronze plan. I am a little uncertain of our expenses once we downsize but I think we can get by comfortably on $50,000/year and possibly less. This would give us some room to do Roth conversions.
I would appreciate any ideas or input on this and can provide more details if needed. Or see my facts in my "Hello" post. Thanks for any help or insight!
