Annuity/pension or the lump!

Some good commentary on the Board. Some thoughts:

~Pension amount does not change with inflation.
~Medical insurance is important, but only up to 65 years of age. After Medicare kicks in, there are several Medigap programs to choose.
~Social Security does adjust with COLA, but who knows what will happen in the future.
~A base Social Security, with a partial annuity, and a variable portion in a self-directed IRA is something to consider for the astute investor. If not, would recommend an annuity/pension component.
~Everyone’s situation is different. Ex-wives, husbands, outside investments, etc. are all part of the planning scenario.
~Early retirees under 59.5 years look into a 72t.
~Retired, manage my own money and life is good, even with the stock market in the cr----r. It will come back.

Comment! It's anonymous!

6 replies (most recent on top)

Worked at Detroit Edison for a bit and then Ford. Retirement is great. Just like everyone says.

A bit of clarification on the HRA. If your start date is post 6/1/2001, your supplement is $800 per year of service once you qualify and when it's gone, it's gone.

Good post but some misinformation in replies.

COBRA isn't $700 per month, more like $350 for medical and dental.
Ford HRA supplement prior to 65 is $6000/year/pp. Ford HRA supplement 65+ is $1800/year. Can use HRA if using Cobra.
if you retire at 55+ and leave your money in company 401k, you can withdraw prior to 59.5 without penalty. A lump sum pension can be placed in 401K so you have access early. Another reason to be careful with any financial advisor that wants to "help" you.
Retired for several years, took monthly pension, still saving money and having no regrets.

@npj most investors who are just retiring or preparing to retire have not been thru a long enough investment time horizon to be aware of all the risks.
Something to think about is how the banks and investment firms have “lost” money to get people into their versions of low cost index funds/ETF and zero/low cost trading fees. Now that they have all the money in their baskets, ask yourself how they will increase their profits.
We at least can get 4% return on short term cash equivalents now, as long as you are mortgage free and controlling spending- inflation isn’t too impactful too retirement.

The latest offer only provides medical for 6 months. Then you either pay $700 a month for Cobra for 18 months or you get your own.

Ford supplements both the medical before 65, and Medicare after 65, with Health Reimbursement Accounts.

I'd stay away from annuities. They are insurance plans, not investments, and filled with fees. Ford's monthly pension/annuity pays higher than any insurance plan out there anyway.
Invest lump sum in S&P 500 Index fund, Total Stock Market Index fund, and Total Bond fund and let them grow.
Retired, manage my own investments ... life is Grand!

Thread regarding Ford layoffs

Annuity/pension or the lump!

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