Signed up today to start pension payments!

[harley]

No pension for us, but DW recently started her SS at FRA. It's not a big check, but it's still nice to know it will keep rolling in without us having to do anything. I'll start mine in 3 years, and that will be even better.

 

[PERSonalTime]

It will be a fantastic feeling. Congratulations!

 

[PERSonalTime]

After 10 years of monthly employer pension deposits I still get a smile on my face when I see the deposit on our on line bank statement.

+1

 

[oldphd]

DW has a modest pension, and since I handle the finances it always makes me smile when it hits the checking account on the first of the month. I tell her she must have met her performance expectations as a retiree since she's still getting paid...

 

[Koolau]

My father looked at it that way, too, working for the Feds.

That's the plus and the minus part of working with a DB pension in your future.

With a DC plan, you have more control on how much to contribute and then later, how much to "pensionize".
Oddly enough, many people look at 401(k) or 403(b) as wealth accumulation rather than Deferred Compensation, and refuse to pensionize any of it.
Damn Insurance Companies, they say, even those in good health...

I was truly blessed. Though my pension wasn't fantastic, I at least had one. AND I had the DC (401(k)) as well. The DC has been much more "fruitful" for my FIRE plan - though I'm glad to have the pension as well.

 

[lucky penny]

​

My sentiments exactly!

 

[catii]

No pension for us, but DW sends me a note each month listing our assets, & what we can spend. It miraculously has gone up every single month since we both FIREd! Seems that it takes money to make more of it.

 

[Alex The Great]

EarlyandLate, this is great! Pensions become a rare animal these days. This is a reason to enjoy it even more and have a nice feeling that your work is appreciated.

 

[Steeler75]

Yep, I think of my pensions as monthly paychecks for doing what I want to do.
When I get the COLA bump, I tell DW that I got a raise for w*rking so hard this last year

Once qualified for retirement, absolutely looked at it as if I just had my regular pay cut by my pension amount.

One of our guys casually mentioned to "Charley" that he was w*rking for half salary. "What do you mean?" "You'd get half your salary if you retired and took your pension."

 

[Koolau]

EarlyandLate, this is great! Pensions become a rare animal these days. This is a reason to enjoy it even more and have a nice feeling that your work is appreciated.

Heh, heh, I don't think I'd go THAT far. Our pension was a lure to w*rk for Megacorp. Before mine matured, they changed it. Shortly after I took my pension, they changed it again. Both times made it worse (like no more COLA available.)

So our "w*rk appreciation" was few and far between.

Not whining too much, but Megacorp never minded making "earnings expectations" on the backs of empl*yees. They even cut the match on the 401(k) several times. Of course, YMMV.

 

[rmcelwee]

I just signed up to begin receiving my pension payments. It was shockingly easy to do so. My only choice is monthly payments for life. It is not huge, but will cover all my current basic living expenses such as housing, insurance, taxes, food and incidentals. (My expenses are pretty modest.)

It took me almost 4 months of phone calls and emails to get my pension (the amount mysteriously dropped by 40% when the pension company was bought out six months earlier). And then, it only covers about 1/3 ($528) of my health insurance. I worked for the company for 32 years. The guys who were hired after 2003 get ZERO. Consider yourself VERY lucky.

 

[EarlyandLate]

It took me almost 4 months of phone calls and emails to get my pension (the amount mysteriously dropped by 40% when the pension company was bought out six months earlier). And then, it only covers about 1/3 ($528) of my health insurance. I worked for the company for 32 years. The guys who were hired after 2003 get ZERO. Consider yourself VERY lucky.

I do feel very lucky! I watched as company after company in my industry cut benefits for employees. I started at the company about 12 to 15 years before the end of the "golden period" as far as the treatment of employees was concerned. It was sad to see all that coming to an end for my younger colleagues. The folks who were at the company 10 or 15 years before me walked out with huge pensions as well as very fat stock accounts. They're the people you see acknowledged as large donors to charitable and arts organizations.

 

[cyber888]

Congrats on the pension.
I have no pension, so got an annuity. When I retire 2 months ago, I decided to turn part of my 401k into a Lifetime annuity with a great company.
It's giving me a 7.13% payrate, so I'm happy. I've already collected 2 months of it paid direct deposit to my bank. It's not a lot, but pays for basic housing expenses, electric/gas bills, and groceries.

And based on 2 retirees on this forum who have been collecting annuities from the same company for years, they've experienced an increase in payouts from the same annuity I got. While it's not COLA equivalent, it still goes up by about 1.5% - 1.8% per year on average.
Enjoy your pension.

 

[rmcelwee]

It's giving me a 7.13% payrate, so I'm happy.

it still goes up by about 1.5% - 1.8% per year on average.

I don't know much about annuities but your post is throwing up red flags to me. 7.13% guaranteed with a 1.5% increase each year. So in 10 years it will pay a guaranteed 22.13%? Or are you saying it will pay 7.13% + 6% of 7.13%? Either way this sounds very scary to me. Which company is it and what is the fund called?

 

[pb4uski]

^^^ You are misinterpreting cyper888's post.

The 7.13% is a payout rate, not an interest rate or yield or rate of return.

IOW, for each $100,000 invested he will receive $7,130 a year. And the next you he will receive ~$7,248 and the third year he will receive ~$7,367, etc.

 

[rmcelwee]

^^^ You are misinterpreting cyper888's post.

The 7.13% is a payout rate, not an interest rate or yield or rate of return.

I reread my post and it was confusing. The 6% of 7.13% was supposed to be after 4 years (4 years of 1.5% increases = roughly 6%). I changed midstream to 10 years to make it the outlandish 22.13% and forgot to change the other part.

Anyway...
I give them $1,000,000. They pay me $71,300 the first year. I die two days later and they keep the remaining $928,700. Am I interpreting correctly?

 

[pb4uski]

.... Anyway...
I give them $1,000,000. They pay me $71,300 the first year. I die two days later and they keep the remaining $928,700. Am I interpreting correctly?

Yup, that's the way that life annuities typically work.. but your $928,700 is part of what pays benefits for one of your cohorts that ends up living to be 105. Life mortality is very predictable for large groups of people and at least in my experience insurers don't make a lot on mortality. Where they make their money is on interest spread.

There are annuity options that mitigate the situation that you describe by guaranteeing return of premium or by guarranteeing a minimum of 10 years of benefits so if you die prematurely your beneficiaries get something.