take pension or not..Help?

[jwr62]

Hi, I am retired with a pension of 1500 a month.. so this is the question ? My husband can not get full pension until he turns 65... so he wants to retire a year earlies... if he pulls his pension a year earlier it will be 3,674 vs waiting a year at 3,941...
I figured that it would take 14 years to make the 44,089 if we did not take a year early.. if we do not take the pension we have a savings that we can pull from...........
would love to hear what you guys think
We both are 63 years old husband going to retire when he turns 64 in October

 

[Chuckanut]

How long do you both expect to live? Will the pension have survivor benefits?

 

[Fedup]

If you have money to live for a year then I would wait to take the pension at 65.

 

[jwr62]

How long do you both expect to live? Will the pension have survivor benefits?

live in our 80's or 90's... we are looking to take the 100% survivor so if husband lives I will get the same

 

[SomedaySoon]

Although the technical response might be to wait a year, there may be other considerations. The OP says she is the same age as her husband and is already collecting her pension. Did she go thru the same analysis to see if it would have been better to wait to collect her own pension also ? Your husbands desire to retire early may be based on seeing that you've already jumped (for whatever reason) and just wants to get out early also? This is not always just a financial decision.

 

[jwr62]

If you have money to live for a year then I would wait to take the pension at 65.[ could you please your reasoning, just asking]

 

[jwr62]

Although the technical response might be to wait a year, there may be other considerations. The OP says she is the same age as her husband and is already collecting her pension. Did she go thru the same analysis to see if it would have been better to wait to collect her own pension also ? Your husbands desire to retire early may be based on seeing that you've already jumped (for whatever reason) and just wants to get out early also? This is not always just a financial decision.

Husband job is very stressful.. it did not matter if my pension if I have of wanted it was going to be about the same...

 

[W2R]

Hi, I am retired with a pension of 1500 a month.. so this is the question ? My husband can not get full pension until he turns 65... so he wants to retire a year earlies... if he pulls his pension a year earlier it will be 3,674 vs waiting a year at 3,941...
I figured that it would take 14 years to make the 44,089 if we did not take a year early.. if we do not take the pension we have a savings that we can pull from...........
would love to hear what you guys think
We both are 63 years old husband going to retire when he turns 64 in October

If you can manage to live on $5174/month without the extra $267/month, I think he should retire at 64 instead of 65. Like all of us, he is not getting any younger and I think that if he wants to retire, it's time.

 

[jwr62]

If you can manage to live on $5174/month without the extra $267/month, I think he should retire at 64 instead of 65. Like all of us, he is not getting any younger and I think that if he wants to retire, it's time.

it would be hard but we could pull from out 403

 

[W2R]

it would be hard but we could pull from out 403

How about Social Security?

 

[Fedup]

If you have money to live for a year then I would wait to take the pension at 65.[ could you please your reasoning, just asking]

Because your comment about it takes 14 years to regain $44k. Plus if your money is in IRA, you won't have to worry about the tax torpedo for RMD. Taking money out of IRA now will reduce that amount.

 

[SomedaySoon]

Husband job is very stressful.. it did not matter if my pension if I have of wanted it was going to be about the same...

But if you were still working now, and did not retire when you did, you may have been able to save up enough for him to retire at the same time you did. If you got a new job now, wouldn't it be easier for the both of you to retire together next year when you are both 64 ? Even at a job that paid less than you were making, you'd have the extra money and he would not be the only one having to go to work every day...... Just saying.....

 

[jwr62]

How about Social Security?

will not get until 66.. husband will get 2600... I maybe about 400, I have the winfall

 

[jwr62]

But if you were still working now, and did not retire when you did, you may have been able to save up enough for him to retire at the same time you did. If you got a new job now, wouldn't it be easier for the both of you to retire together next year when you are both 64 ? Even at a job that paid less than you were making, you'd have the extra money and he would not be the only one having to go to work every day...... Just saying.....

we have a disabled child so I am unable to work... he was in a group home when I was working but found out that he was being abused so we brought him home.

 

[W2R]

will not get until 66.. husband will get 2600... I maybe about 400, I have the winfall

So really, the long term question is if you can live on $8164/month without the extra $267/month.

To me, that $267 seems like pocket change compared with your overall income at that age. Also, think of the effect on your relationship; if he wants to retire, and you encourage him to do so, he may really appreciate such a caring gesture.

 

[jwr62]

So really, the long term question is if you can live on $8164/month without the extra $267/month.

To me, that $267 seems like pocket change compared with your overall income at that age. Also, think of the effect on your relationship; if he wants to retire, and you encourage him to do so, he may really appreciate such a caring gesture.

I feel that taking the money early will help our stress level and I think the same thing... we are going to see a guy to help with all of this but I have gone with most of what I have gotten on this forum and another one... thanks

 

[Music Lover]

So really, the long term question is if you can live on $8164/month without the extra $267/month.

To me, that $267 seems like pocket change compared with your overall income at that age. Also, think of the effect on your relationship; if he wants to retire, and you encourage him to do so, he may really appreciate such a caring gesture.

$267 out of $8,164 is basically a rounding error. If necessary, I'm sure $267 can easily be trimmed from monthly expenses with little or no effort.

 

[pb4uski]

live in our 80's or 90's... we are looking to take the 100% survivor so if husband lives I will get the same

If the numbers that you quoted are joint life then IMO it is a slam dunk to wait a year (from 64 to 65). The increase in benefits for waiting a year is 7.3%... better than SS and better than a SPIA by a lot.

Break even point with 0% interest is ~79 so if you expect to live to 80s-90s then you will come out ahead.

 

[Music Lover]

Break even point with 0% interest is ~79 so if you expect to live to 80s-90s then you will come out ahead.

The real question is will they be able to enjoy the little bit extra by that age, or will their energy be too sapped to care? Is it really worth giving up your healthiest year of retirement for an extra $267 when you're almost 80?

 

[pb4uski]

You don't get it. They would NOT be giving up a year of retirement... OP's DH would still retire at 64 but they would live on savings for that first year and then he would start his pension at 65 rather than 64.

Another way of thinking of it is that they are giving up/paying $44,088 for a joint live pension of $3,204/year for life... a 7.3% payout rate... better than anything commercially available. Slam dunk... easy decision.

 

[Music Lover]

I missed the part about retiring anyway.

But...a slam dunk easy decision? Maybe for some people it is, but it's not that that simple for everyone.

 

[PERSonalTime]

Since stress is a part of the decision equation, the answer is really simple...get out now, take the pension now, and 14 years later when you're husband is 78 you can look at each other and say, "damn if you had waited one more year we could have had another $200-300 a month more". NOT!!!!

Retire at 64, get the money and enjoy life!!!

 

[Teacher Terry]

Since 3 of my close friends were dead in late 50's and early 60's I would say retire.

 

[pb4uski]

There are two decisions that the OP is facing.

1. Whether OP's DH will retire or not. While not conclusive from what the OP wrote it sounds like that ship has sailed and the OP's DH will retire in October when he turns 64.

2. Whether DH should start his pension when he retires at 64 or a year later at age 65. The OP has made it clear that they have savings to defer starting his pension for a year if they wish to.

So the second decision principally becomes a financial decision... trading $44,088 for an extra $3,204 a year for as long as one or the other of them is alive. The trade is better than you would get with SS (at their ages benefits increase ~6.25% for each year that you defer) and much better than a SPIA (if they paid $44,088 for a SPIA at age 65 the annual payments would only be $2,484).... so deferring starting the pension for a year is the better decision financially.... and it doesn't impact them at all since they will still be retiring early and this decision will not impact their lifestyle... a simple trade-off makes the next 30 years more secure.

Or put another way... when someone offers you $129 for a $100 bill... what would you do?

 

[perez99]

There are two decisions that the OP is facing.

1. Whether OP's DH will retire or not. While not conclusive from what the OP wrote it sounds like that ship has sailed and the OP's DH will retire in October when he turns 64.

2. Whether DH should start his pension when he retires at 64 or a year later at age 65. The OP has made it clear that they have savings to defer starting his pension for a year if they wish to.

So the second decision principally becomes a financial decision... trading $44,088 for an extra $3,204 a year for as long as one or the other of them is alive. The trade is better than you would get with SS (at their ages benefits increase ~6.25% for each year that you defer) and much better than a SPIA (if they paid $44,088 for a SPIA at age 65 the annual payments would only be $2,484).... so deferring starting the pension for a year is the better decision financially.... and it doesn't impact them at all since they will still be retiring early and this decision will not impact their lifestyle... a simple trade-off makes the next 30 years more secure.

Or put another way... when someone offers you $129 for a $100 bill... what would you do?

This ^^ is the right framing...