DH took a severance package from his company that started effective 12/10. He will receive his full pay for 18 months and he earned approx $74000.00 per year. That will end in 05/12. He also qualifies for 11/12 of a bonus for 2010, if there is one. Last year was the first year in 19 yrs that there was not a bonus. He would get somewhere between $12000.00 and $14000.00 bonus normally.
The day before the severance package came to our house (out of the blue), I told my DH that he could not keep working due to his disability. I was afraid that he was going to have a complete nervous breakdown and was worrying whether he was becoming suicidal. He filed for LTD and was approved. He does not receive any money from LTD because his severance pay is higher. The earliest that he can receive any money from LTD is 06/12, if he is still qualifies at that time. He is currently qualified because he can't do his job at his company, but 06/11 he has to meet the definition of not being able to do any job in our city that he has the experience and education, so a harder definition and he might be denied. He is considered a disabled participant through his company and accrues time for his pension purposes. If he stays disabled for LTD it would end at age 65. Unreduced age for his pension is age 60. DH turned 59 in 12/10.
Here are our choices. He can start his pension effective 12/10 and receive $1209.96 per month and withdraw a special retirement account (SRA) of $15 852.66 or $1288.00 per month not withdrawing the SRA. He must start his pension effective 12/10 if he wants health ins or life insurance in the amount of $10000.00. We do not want the medical ins as we are covered under Federal medical insurance through my pension. He does not have any life insurance. If he starts his pension, then his time with his company stops. If he should die while he is qualified for disability, his life insurance is $74000.00. That ends when his disability ends.
If he waits until age 60 (unreduced) to take his pension which would be effective 01/01/12 then his pension amount would be $1358.35 withdrawing the SRA estimated balance $16759.33 or $1442.37 not withdrawing the SRA. If he waits until age 65, then his amount effective 01/01/17 would be $1674.83 withdrawing the SRA estimated balance $20577.22 or $1787.40 without withdrawing the SRA.
If he starts his pension and he still qualifies for LTD in 06/12, his pension will be deducted from his LTD amount which is higher.
I am also trying to take into account how much of pension would go to taxes. His 401K has ended, so I am assuming that we will have to pay more taxes. We were maxing out his 401K. I receive a pension of approx $36000.00 per year and work a part-time job working 24 hrs per week at $8.50 per hour. I will be with my job a year in 03/11 and think that my salary will go to $9.00 per hour. I will qualify to participate in a 401K at work at that time and plan to put whatever the max I am allowed. For tax purposes, we have no dependent children, own our house and do not itemize.
If DH is going to take his pension starting 12/10 then they have to receive the paperwork by 01/31/11.
Thank you in advance for any help.
The day before the severance package came to our house (out of the blue), I told my DH that he could not keep working due to his disability. I was afraid that he was going to have a complete nervous breakdown and was worrying whether he was becoming suicidal. He filed for LTD and was approved. He does not receive any money from LTD because his severance pay is higher. The earliest that he can receive any money from LTD is 06/12, if he is still qualifies at that time. He is currently qualified because he can't do his job at his company, but 06/11 he has to meet the definition of not being able to do any job in our city that he has the experience and education, so a harder definition and he might be denied. He is considered a disabled participant through his company and accrues time for his pension purposes. If he stays disabled for LTD it would end at age 65. Unreduced age for his pension is age 60. DH turned 59 in 12/10.
Here are our choices. He can start his pension effective 12/10 and receive $1209.96 per month and withdraw a special retirement account (SRA) of $15 852.66 or $1288.00 per month not withdrawing the SRA. He must start his pension effective 12/10 if he wants health ins or life insurance in the amount of $10000.00. We do not want the medical ins as we are covered under Federal medical insurance through my pension. He does not have any life insurance. If he starts his pension, then his time with his company stops. If he should die while he is qualified for disability, his life insurance is $74000.00. That ends when his disability ends.
If he waits until age 60 (unreduced) to take his pension which would be effective 01/01/12 then his pension amount would be $1358.35 withdrawing the SRA estimated balance $16759.33 or $1442.37 not withdrawing the SRA. If he waits until age 65, then his amount effective 01/01/17 would be $1674.83 withdrawing the SRA estimated balance $20577.22 or $1787.40 without withdrawing the SRA.
If he starts his pension and he still qualifies for LTD in 06/12, his pension will be deducted from his LTD amount which is higher.
I am also trying to take into account how much of pension would go to taxes. His 401K has ended, so I am assuming that we will have to pay more taxes. We were maxing out his 401K. I receive a pension of approx $36000.00 per year and work a part-time job working 24 hrs per week at $8.50 per hour. I will be with my job a year in 03/11 and think that my salary will go to $9.00 per hour. I will qualify to participate in a 401K at work at that time and plan to put whatever the max I am allowed. For tax purposes, we have no dependent children, own our house and do not itemize.
If DH is going to take his pension starting 12/10 then they have to receive the paperwork by 01/31/11.
Thank you in advance for any help.