If you are closer to retiring or have recently retired with pension how are you handling this (pension + social security) and why?
(1) Pension --- lump sum & Social Security --- early or FRA or delay
(2) Pension --- monthly & Social Security --- early or FRA or delay
If you are working with a financial advisor or tax consultant what advise did you get?
Some thoughts.
The pension is probably the better deal compared to the lump sum. Why? The discounted interest rates have increased in the last two years, decreasing drastically your lump sum. Also, depending upon your bills, your Social Security is something you need to evaluate in order to ascertain when to take it. Many folks advocate 70 but for many, this is not financially viable, since they need the cash flow now, or in the near future. Those who have a Traditional IRA can convert to a Roth, but it is important to understand the tax implications. The best investment you can do in this arena is to contact a tax accountant (not H&R Block), but a tax CPA or an Enrolled Agent for a review. Yes, they will charge for the evaluation, but the planning will save you thousands in the long-run. A good time to convert is when your tax rate is low, say in the 10, 12% tax rate A spread-out of the conversion is usually recommended over a number of years to reduce the tax.
After seeing your tax accountant, depending upon your financial knowledge, I would recommend a financial advisor at least for a preliminary look. During retirement planning sessions, names from other participants of advisors can be obtained. Any way, good luck. If you are financially astute, a self-directed IRA is something to consider. And as many folks have stated, the medical insurance is the real stickler before 65. If you have it through Ford, great. If not, this can be what may preclude you from retirement or at least your "vision" of what retirement is about.
I will be lucky. Haven't retired yet but will in the next few years. I have 2 small pensions (one from a prior company and a second from survivor benefits from my late husband). I plan on taking a lump sum and applying for widow's benefits, delaying my social security until I'm 70. My current husband is a GM hourly retiree, has a pension, and health insurance for life ($30 a month). If he passes before me, I will be able to continue the health insurance.
Just so I'm clear, you enrolled at a local Univ. and got Student health insurance for the family. Do you have to have minimum credit hours? Is one class enough?
Yes to local university and health care for my wife and I. Each university’s requirements are different for credit hours. Mine requires at least one credit. I take 2.
Also, you're able to get Via Benefits to use your Ford HRA to cover for your premiums?
I use ViaBenefits HRA to pay for the insurance. It qualifies because it optional and not employer based. My cost is about $12k. The closest I could figure me on the open market place was more than $39k. A few thousand in tuition is a bargain. Although the guitar was $1800.
@1lpn+1oNyzc0u - Thanks for the tip. Very helpful.
Just so I'm clear, you enrolled at a local Univ. and got Student health insurance for the family. Do you have to have minimum credit hours? Is one class enough?
Also, you're able to get Via Benefits to use your Ford HRA to cover for your premiums?
Health insurance is less expensive for university students. Retire, go back to school, get your health insurance cheep and enjoy life. That’s what I did. Ford’s $12K HRA covers all cost. We have BCBS PPO with a $500 deductible and $20 copay.
Schools does require some work but my wife doesn’t care about my grades (currently 4.0 after 5 semesters).
Look at the % of people, especially men, that live past 78. Let alone 82.
Also factor in other lifestyle choices: drink? smoke? eat unhealthy? New your chances of hitting 80 are minimal.
If you're not drawing at 62 you are gambling.
@1xcy+1oNyzc0u I'd recommend staying in the workforce while you can because of income, health insurance and occupying your time. If you haven't done it by now, use the salary to aggressively pay off your home, cars and debts. The idea is to lower your expenses, so you'd need less income to live. That way, your medical expenses can be covered by Obamacare (until 65), and your savings/pension would last longer.
If you're at Ford, just dial down your efforts to 40 hours a week, no more unpaid OT. Remove all the work stress of your life, is not good for your health.
If you're at Ford with a pension, consider taking the lump sum vs the monthly payment. If going for the latter, I'd follow the previous paragraph. If going for the lump sum, time to cash out, and find another job.
If you're at Ford with no pension, still I'd recommend dialing down your efforts and finding another job.
Took the lump sum from Ford. I am delaying Social Security until 70. Mean while, we are doing ROTH conversions while we are in a low tax bracket. Living off of funds from our brokerage account in order to keep our income low.
Regarding Social Security, there are several calculators out there. Since I'm married, I'm not sure if that changes the calculation but when I ran the calculator-
I suppose if you factor in the interest you lose on spending your other money by delaying, the break-even point might be a year or two less.
This topic had been covered before. Search this site or go to the internet
What are the disadvantages of taking the monthly payment instead of the lump sum?
I would retire but have to stay in the workforce because health insurance is too expensive otherwise. If someone had a better solution I would retire this year. Please don't say move to Canada, they have their own problems.
If you have a good financial advisor, they can invest your lump sum and grow it into a higher monthly payment then if you took your pension as a monthly payment from Ford. Haven't made the final decision on social security yet as I'm only 57, but probably leaning toward taking it early.
Delaying social security can help with Roth conversions and taxes during 62-70
There's no advantage to not using it at 62. Do the math.
@syd+1oNyzc0u
Do you want to delay social security until 70 or take it a little sooner?
@syd+1oNyzc0u
Do you want to delay social security until 70 or take it a little sooner?
I retired from Ford last year. I am only 57.
I had enough after 25 years at Ford. I was lucky to have a good 401k and pension lump sum. I can't use all of it in 30 years.
I am planning to retire this year. Package will be cherry on top. I will take lump sum if I retire before 12/1/23 and take social security at 62 as one of my monthly income sources.