Glad you got it resolved. I wasn't even aware of the potential for a penalty! I retired last year at age 56, full pension based on rule of 85. Box 7 has code 2, no penalty.
That said, had I deferred taking my pension, my monthly payments would have been higher the longer I waited. I had to figure out the value of the money left on the table, compared to the increased payments over my expected lifetime. Like all retirement math, it's easy to do if you know exactly when you plan to die
As it turns out, a smaller pension from a prior company uses a different calculation which makes it much more advantageous to wait as long as possible before starting distributions. So I'm not taking that one until I need to.
That said, had I deferred taking my pension, my monthly payments would have been higher the longer I waited. I had to figure out the value of the money left on the table, compared to the increased payments over my expected lifetime. Like all retirement math, it's easy to do if you know exactly when you plan to die
As it turns out, a smaller pension from a prior company uses a different calculation which makes it much more advantageous to wait as long as possible before starting distributions. So I'm not taking that one until I need to.
