|
|
06-24-2015, 11:15 AM
|
#21
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
|
joint and survivor versus joint and last survivor, I think that's IRS parlance
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
|
|
|
|
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 Early-Retirement.org 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!
|
06-24-2015, 01:11 PM
|
#22
|
Recycles dryer sheets
Join Date: May 2015
Location: Houston
Posts: 337
|
Not to throw a wrench in thw works, but is there a lump sum option?
With interest rates pretty low, the lump sum payments tend to be higher than usual.
|
|
|
06-24-2015, 02:27 PM
|
#23
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Unfortunately, no lump sum option.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-24-2015, 03:05 PM
|
#24
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
Quote:
Originally Posted by pb4uski
Unfortunately, no lump sum option.
|
I just noticed you did not put down the amount if there were no survivor options... IOW, what would you get if you were the only beneficiary...
I think most of the people that were comparing were not doing so apples to apples...
|
|
|
06-24-2015, 03:30 PM
|
#25
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
The no survivor option, just for my life, is the $1,613/month in the OP. The $1,613 is for 10 years guaranteed. With 0 years guaranteed the benefit is $1,642 and 5 years is $1,635. While I plan to stay around for some time. I'm thinking the give up of $29/month for 10 years of guaranteed payments is preferable since then either me, DW or our kids will at least get a good chunk out of that pension. With the 0 years guaranteed if I die shortly after I start my pension the plan would get off scot-free and that wouldn't sit well with me.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-24-2015, 10:30 PM
|
#26
|
Confused about dryer sheets
Join Date: Jun 2015
Posts: 7
|
A 23 year break even point ignoring inflation, investment returns, and the leverage of having additional purchasing power earlier in retirement... Seems like you answered your own question in regards of when to take it.
In my organization we have a defined benefit plan and every so often the question comes up in regards to whether it is better to go into drop and basically take your pension now in a tax deferred account for up to 5 years or continue accruing the additional multiplier (2.72) and higher average end salary the pension is based on after the 5 years and then take a 10 or 25% lump sum based on the actuarial value or just run with the higher benefit. My default response is always that it is better to go into drop and draw the pension instead of building it up because as you already keyed in on the break even part is soooo far out that it isn't worth it. In the 6 or so times I've had this conversation at work the majority of people going into it think it's better to accrue the additional pension time but after they get into the numbers it never is (unless you had a huge promotion and needed the additional time to up the salary average to the new level).
|
|
|
06-24-2015, 11:26 PM
|
#27
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
Quote:
Originally Posted by pb4uski
The no survivor option, just for my life, is the $1,613/month in the OP. The $1,613 is for 10 years guaranteed. With 0 years guaranteed the benefit is $1,642 and 5 years is $1,635. While I plan to stay around for some time. I'm thinking the give up of $29/month for 10 years of guaranteed payments is preferable since then either me, DW or our kids will at least get a good chunk out of that pension. With the 0 years guaranteed if I die shortly after I start my pension the plan would get off scot-free and that wouldn't sit well with me.
|
Opps... yes, it was right there and I even read it...
|
|
|
06-25-2015, 12:08 PM
|
#28
|
Recycles dryer sheets
Join Date: Nov 2014
Location: Texas
Posts: 164
|
You can't take a lump sum payment?
Sent from my iPhone using Early Retirement Forum
|
|
|
06-25-2015, 08:41 PM
|
#29
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
No, this plan does not allow a lump sum. Big Hitter would know better but I don't think the lack of a lump sum option is at all unusual.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-25-2015, 08:48 PM
|
#30
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
So who do you think will live longer
Can either of you live off 50% if the other dies?
For me, that looks like the best option. You get a full pension for as long as you live.... and whenever the first passes, they get 50% going forward...
|
|
|
06-25-2015, 09:02 PM
|
#31
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
That's a tough one. Statistically, DW should out live me, but she does have more little aches and pains than I do, but they are more annoyances than anything serious. My family history is a bit better, especially on my mother's side. Net, its probably a toss-up.
I'm leaning towards the joint life/100%. Here's why... if I take the benefit at age 60 and divide it by the payout ratio for a SPIA issued to a couple at age 60 I can get the approximate fair values of the plan. The joint life/100% is ~$340k and the Joint/50% is ~$350k. I like that the joint life/100% maximizes the benefit to DW if I die since her income will decline by 1/2 of my SS when I die I don't see it makes sense to have it also decline by 1/2 of my pension. The joint life/100% just "feels" right.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-25-2015, 09:32 PM
|
#32
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
Quote:
Originally Posted by pb4uski
That's a tough one. Statistically, DW should out live me, but she does have more little aches and pains than I do, but they are more annoyances than anything serious. My family history is a bit better, especially on my mother's side. Net, its probably a toss-up.
I'm leaning towards the joint life/100%. Here's why... if I take the benefit at age 60 and divide it by the payout ratio for a SPIA issued to a couple at age 60 I can get the approximate fair values of the plan. The joint life/100% is ~$340k and the Joint/50% is ~$350k. I like that the joint life/100% maximizes the benefit to DW if I die since her income will decline by 1/2 of my SS when I die I don't see it makes sense to have it also decline by 1/2 of my pension. The joint life/100% just "feels" right.
|
Yes... I would agree... if she needs a pension/SS income to supplement living expenses it is the way to go.... no need to have both income streams cut if either of you pass...
If you had enough in assets where it did not matter a lick, well, maybe not... but then again I did not do any NPV on any of the streams... I am just going by gut feeling...
|
|
|
06-26-2015, 05:53 AM
|
#33
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Interesting angle. If I take my QLP retirement plan and assume that I die today, hold all other assumptions the same and compare joint/100% to joint/50% she still never runs out of money... but her age 99 NW is 60% higher with joint/100% vs joint/50%.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-26-2015, 08:19 AM
|
#34
|
Full time employment: Posting here.
Join Date: Oct 2013
Posts: 512
|
Quote:
Originally Posted by pb4uski
No, this plan does not allow a lump sum. Big Hitter would know better but I don't think the lack of a lump sum option is at all unusual.
|
My megacorp pension does not have a lump sum option or a beneficiary option while working, except for a spouse (default.) I have always assumed that this is because the pension is funded by the company. By that I mean that there are no deductions from my paycheck for the pension. Their cash, their rules. It increases at 4% per year from 55 to 62, which is the maximum amount you can get. No COLA. I plan to start it at 55 because that is a requirement for access to the retiree health care benefits (if they still exist in 4+ years.)
I also have a public sector pension from a civil service gig which was my first fulltime job. I paid ~8% of my check into the program and it does have lump sum and death benefit options. It also has a 3% fixed COLA, so I'm hoping to live long enough to see some value for all the years off waiting that I've done!
FWIW - I like the joint/100% option because it follows the KISS principle.
|
|
|
06-26-2015, 08:29 AM
|
#35
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
Quote:
Originally Posted by pb4uski
Interesting angle. If I take my QLP retirement plan and assume that I die today, hold all other assumptions the same and compare joint/100% to joint/50% she still never runs out of money... but her age 99 NW is 60% higher with joint/100% vs joint/50%.
|
Yes, that makes sense because you just cut your pension in half just when it started.... (not quite half of the 100% since it starts lower already)....
The better question is what would happen if you died in 10, 15, 20 etc. years.... I would think that somewhere in the 15 to 20 year range it would make sense for the 50% option.... more money up front with the reduction in many years....
|
|
|
06-26-2015, 09:10 AM
|
#36
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2013
Location: Les Bois
Posts: 5,761
|
Quote:
Originally Posted by NoiseBoy
FWIW - I like the joint/100% option because it follows the KISS principle.
|
nothing against a 100% J&S but do realize it comes with a haircut, usually 20% or so depending on the assumptions used and spouse age difference
I advised my Dad to get the 100% J&S when he retired in 92 and they are both still alive
__________________
You can't be a retirement plan actuary without a retirement plan, otherwise you lose all credibility...
|
|
|
06-27-2015, 04:00 PM
|
#37
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Quote:
Originally Posted by Texas Proud
Yes, that makes sense because you just cut your pension in half just when it started.... (not quite half of the 100% since it starts lower already)....
The better question is what would happen if you died in 10, 15, 20 etc. years.... I would think that somewhere in the 15 to 20 year range it would make sense for the 50% option.... more money up front with the reduction in many years....
|
I took QLP and looked at end of plan (DW is 99) NW if I die at 60, 70, 80 or 90 under Joint/100 or Joint/50 assuming a 10% reduction in expenses once I die. Joint/100 comes out consistently higher unless I live past 83 or so, then Joint/50 comes out ahead. If I live to 99, then our NW is about 7% lower with Joint/100 vs Joint/50 but I can live with that because of the protection that it offers DW.
So Joint/100 seems to be the winner.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
06-28-2015, 08:05 AM
|
#38
|
Recycles dryer sheets
Join Date: Jan 2014
Posts: 274
|
Quote:
Originally Posted by pb4uski
I took QLP and looked at end of plan (DW is 99) NW if I die at 60, 70, 80 or 90 under Joint/100 or Joint/50 assuming a 10% reduction in expenses once I die. Joint/100 comes out consistently higher unless I live past 83 or so, then Joint/50 comes out ahead. If I live to 99, then our NW is about 7% lower with Joint/100 vs Joint/50 but I can live with that because of the protection that it offers DW.
So Joint/100 seems to be the winner.
|
i'll be doing the same, thinking of it more as insurance of income stability for DW when I croak than as some total return on a date I can't nail down (croaking...)
|
|
|
06-28-2015, 11:16 AM
|
#39
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Posts: 17,244
|
Quote:
Originally Posted by pb4uski
I took QLP and looked at end of plan (DW is 99) NW if I die at 60, 70, 80 or 90 under Joint/100 or Joint/50 assuming a 10% reduction in expenses once I die. Joint/100 comes out consistently higher unless I live past 83 or so, then Joint/50 comes out ahead. If I live to 99, then our NW is about 7% lower with Joint/100 vs Joint/50 but I can live with that because of the protection that it offers DW.
So Joint/100 seems to be the winner.
|
Good for you...
And if your NW is 7% lower.... well, that is also a good thing... so a win win....
|
|
|
06-28-2015, 12:10 PM
|
#40
|
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,374
|
Good point.. it is a win-win assuming that I am doing more than just breathing.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
|
|
|
|
|
Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
|
|
Posting Rules
|
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts
HTML code is Off
|
|
|
|
» Recent Threads
|
|
|
|
|
|
|
|
|
|
|
|
|
» Quick Links
|
|
|