Join Early Retirement Today
Thread Tools Search this Thread Display Modes
Payout Calculation Question
Old 08-08-2011, 08:18 AM   #1
Dryer sheet aficionado
BooBoo's Avatar
Join Date: Oct 2010
Posts: 39
Payout Calculation Question

I have the option to take an early retirement from a company I worked for in the past at a reduced payout. I am still actively employed and do not currently need the additional income. I am not sure how to calculate the best payout option. The payouts are below with no cola:

@ 55 279
@ 62 363
@ 65 399

Married ,age 55, current tax bracket is 28% and will be less when fully retired. Payments will cease when I pass.

Your input is appreciated,

Boo Boo

BooBoo 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 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 08-08-2011, 10:05 AM   #2
braumeister's Avatar
Join Date: Feb 2010
Location: Flyover country
Posts: 15,649
Looks to me like the payout goes up 4.3% per year from 55 to 62, and 3.3% per year from 62 to 65.

I would use those values to determine how long to delay receiving it. That would give you an idea of whether to delay it or not.

I thought growing old would take longer.
braumeister is offline   Reply With Quote
Old 08-08-2011, 10:13 AM   #3
Thinks s/he gets paid by the post
MasterBlaster's Avatar
Join Date: Jun 2005
Posts: 4,374
here's a nifty lump-sum calculator. Put in your info, pick a mortality table, pick an interest rate (ie. a discount rate) and compare lump sums.

Modify your birthdate so that you appear to the calculator to be 55,62,65 (or whatever).

Then compare lump sums.
MasterBlaster is offline   Reply With Quote
Old 08-08-2011, 10:49 AM   #4
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 26,524
Looks like 62 is the sweet spot. Since you don't need the money now, it wouldn't earn much in the current environment and any amounts received now would increase your taxes, I would lean towards letting it ride until you retire unless your health is poor or the pension is seriously underfunded and not covered by the PBGC.
pb4uski is offline   Reply With Quote

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
Preventing hang over question My Dream Other topics 19 08-02-2011 10:33 AM
Trouble understanding I Bond interest calculation Tom52 FIRE and Money 2 07-09-2011 03:53 PM
Early withdrawal rules question bizlady FIRE and Money 2 06-23-2011 01:09 PM

» Quick Links

All times are GMT -6. The time now is 01:37 AM.
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2020, vBulletin Solutions, Inc.