Pension Question

[mdsmith1]

The $240k is cash balance. I can leave my pension until 65 and it will continue to grow. Not sure of the interest rate past this year but assume it will be in the same range.

Wife is 57 and can take her pension at 60. If she decides to work longer it could grow but don't think that will happen.


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[mdsmith1]

And yes the $1100 and her $30k are 100% for us both for life.


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[Big_Hitter]

Quote:

Originally Posted by pb4uski Huh? Why couldn't anyone do it through an IRA, even if they don't already have one. $240k or $1 million, the amount it doesn't matter. It woudl be foolish to take it in cash and pay tax on it all at once.

I agree - I'm just saying if he can get a 100% J&S $1100 monthly annuity for 240K good deal...depends on the spouse age

[Big_Hitter]

OP: one other thing to consider regarding the cash balance annuity - if your plan was "converted" from a traditional DB plan part of that annuity is based on the old plan (i.e. protected), so you could be getting a better deal from the annuity side that way. Did they give you any "relative value" disclosures on your packet?

[mdsmith1]

I don't know the answer to your question big hitter. As far as I know there have been no changes to the plan during my 20 years.


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[unno2002]

An example of a rental home we have, bought in 2013 for $77,500, rented for $805/month, after expenses putting in our pocket (ignoring tax write off's) a consistent $583/month. This is a 9% "annuity", from an appreciating asset that can be left to the spouse, kids, etc.

If you found similar deals, $240,000 represents three such units, which in theory would be monthly payments of $1,749, as well as capital appreciation, that can be inherited by a spouse, child, etc.

Your mileage may vary...