I plan to take my pension in October when I turn 55. The 2 options I am considering are to take $1324 per month for life with 100% and Survivor benefits or take $2113 until 62 then it drops to $638 per month also with 100% Survivor benefits.I have another full time job so I plan to save this pension income for 5 years and they retire completely. What do you think would be the best option? I realize a big factor is how long will I live. I would appreciate any advise you might have.
Pension Options
- Thread starter Hurley
- Start date
Coach
Thinks s/he gets paid by the post
Hi Hurley, and welcome to the forum.
Is the pension COLA adjusted, or will it still be paying $1324 20 years from now?
Coach
Is the pension COLA adjusted, or will it still be paying $1324 20 years from now?
Coach
OAG
Thinks s/he gets paid by the post
Welcome to the board.
A lot depends on so many variables, do you want to draw the most money, what are your plans for taking SS at what age, what will your spouse draw in benefits either from work or SS, is there a large age differential, COLA (as already mentioned), other assets available and expected return(s), expenses expected in retirement, medical benefits needed or provided. I have worked on a spreadsheet that takes all of that into consideration for DW and myself and I find that it needs constant revision however that is the only way I know of to adjust all the variables that are unique to our situation.
Opps, I was posting while you were typing.
A lot depends on so many variables, do you want to draw the most money, what are your plans for taking SS at what age, what will your spouse draw in benefits either from work or SS, is there a large age differential, COLA (as already mentioned), other assets available and expected return(s), expenses expected in retirement, medical benefits needed or provided. I have worked on a spreadsheet that takes all of that into consideration for DW and myself and I find that it needs constant revision however that is the only way I know of to adjust all the variables that are unique to our situation.
Opps, I was posting while you were typing.
crazy connie
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What happens if you defer tapping it? Some continue to grow and some do not. Since you have another fulltime job with adequate income that mey be an option and no taxes to be paid. Also, do you have a cash out option and the ability to roll to an IRA? What do survivor options look like cost wise?
crazy connie
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If the wages in the new job are decent you might be bumping your tax bracket and paying a good bit in taxes only to invest it. Can you get a better than 4% rate of return after the tax hit? It might be nice to have a larger monthly sum later rather than cash in the bank. I know some of the math wizards might be able to help you better on this than I can. Just a thought and worth consideration if you and spouse have a good life expectancy.
donheff
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Don't forget to evaluate the tax implications. Most pension income is taxed as regular income so if you are in a high bracket while working you can kiss some goodbye. When you turn 62 and income drops the pension income may be taxed at a substantially lower rate.
Texarkandy
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Sometimes life insurance is cheaper than a "survivor" option.
