Delawaredave5
Full time employment: Posting here.
- Joined
- Dec 22, 2004
- Messages
- 699
Megacorp has "un-reduced" non-cola pension at 58.
Co-worker left at 52 - they can start their pension - but it is reduced by 5% per year - so 30% for starting 6 years early.
Financially, seems to make sense to not draw pension now (if don't need money) and get a larger amount in future.
If they take now, would need to grow 7% each year to equal what you'd get following year - and I think that's after tax. Couldn't do that at comparable risk.
Are there any reasons or conditions where they would want to take reduced pension now ?
1. I guess if the solvency of the pension was at stake and they wanted to "get all they could now".
2. Is there a survivor benefit risk ? If the person delaying the pension unexpectedly died before starting pension, I don't know how the surviving spouse would be affected.
Seems like the best decision is to defer starting pension.
Appreciate any thoughts !
Co-worker left at 52 - they can start their pension - but it is reduced by 5% per year - so 30% for starting 6 years early.
Financially, seems to make sense to not draw pension now (if don't need money) and get a larger amount in future.
If they take now, would need to grow 7% each year to equal what you'd get following year - and I think that's after tax. Couldn't do that at comparable risk.
Are there any reasons or conditions where they would want to take reduced pension now ?
1. I guess if the solvency of the pension was at stake and they wanted to "get all they could now".
2. Is there a survivor benefit risk ? If the person delaying the pension unexpectedly died before starting pension, I don't know how the surviving spouse would be affected.
Seems like the best decision is to defer starting pension.
Appreciate any thoughts !