Aces High Bulletin Board
General Forums => The O' Club => Topic started by: Eagler on April 13, 2023, 08:04:22 AM
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As this board is filled with them, who better to ask.. :)
Do or did you have a pension?
Did you pull it out as a lump sum or are you receiving monthly payments from it?
To those receiving it as monthly payments, have their distributions changed over different economic times?
Thanks for any insight
Eagler
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Heard a funny one about Social Security.
Ah, you probably won't get it.
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I think you are confusing pensions with IRAs and annuities. A pension (at least a public civil service style) is similar to SS in that you are given a set amount each month and there is no cap to it. You cannot draw out a lump sum unless you are leaving the pension option by changing employment prior to retiring.
A pension from a private company depends on the contract you have / had with the company and how solvent they are. Toad can tell you all kinds of info about that situation.
First one is from the city / state from my PD job.
Second pension is from the Army / DOD a partial amount based upon how many years and "points" I compiled while in the Reserves and I became eligible for that at age 60. The pay is about 1/3 what I would have gotten had I been active the entire time.
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I retired from the Air Force in '95. E-7, 20 years and a few days. When I retired the active compensation for my rank and time is service was about $40K. Today the total compensation for the same grade and TIS is about $80K. The last COLA increase we got was pretty good but my retirement pay has probably increased 40% to 50% or so in the last 28 years. Certainly not 100% like the active compensation. No complaints from me though. I'm quite content with that.
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I have two pensions.
One I have the option of various monthly payouts only and one either monthly payouts or I can take it as lump sum
My ex seabee father in law is of the pull out the lump sum to avoid losing it if the company goes belly up..the trucking co he drove for after retirement from the military took a dump shortly after he left it to retire early at 64
Just wondering what some have done here
Thanks for any info!
Eagler
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No complaints here. My pension is $170 a month. :x
Had a ten year stretch where I made good money which bumped SSI quite a bit. Took SSI at 66. Retired at 70. Sold the house, paid cash for another. No longer have a gardner, a pool guy, or a house keeper. No longer have a 250 a month for gas. We are both have SSI, no bills and my taxes are zero. I don't touch my 401k.
Anyone that takes SSI at 62 is crazy. It all comes down to is that I see no difference in my standerd of living.
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No one knows what will happen to Social Security. It's been raided so often to pay for things never intended I might be inclined to start drawing as soon as I could if I were younger. I did the math and waited 'til I was 65. I still work part time. Remote IT work.
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I think taking SSI is an individual decision
64 this Saturday and I don't see the need to wait another 2 years and 10 months for full retirement age to collect
Medical is my main concern as with 5 year old stents, my preexisting condition makes health insurance expensive and pretty much catastrophic coverage only as everything is under ridiculous deductibles
Eagler
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No one knows what will happen to Social Security. It's been raided so often to pay for things never intended I might be inclined to start drawing as soon as I could if I were younger. I did the math and waited 'til I was 65. I still work part time. Remote IT work.
That worry is just another distraction
If we have money to put illegal families in 5 star hotels and pay billions in foreign wars they will have money for SSI..just need to climb the MMT magic money tree and pick another trillion or 2...
Of course bread and gas will be quadruple but sure it will be subsidized with more funny money :)
Eagler
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If you plan to keep working while drawing SS do the math. They will deduct $1 for every $2 you make over $21,240. That's only while you are under full retirement age. Actually until the year you turn full retirement age I think. You eventually do get that back though.
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Medicare starts at 65. Part A is free. If you are drawing SS they will automatically deduct about $165/mo for Part B depending on your income. You don't have to buy Part B but if you don't want it you have to tell them.
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Depending on your zip code part B is free. Medical is transfered to the usual plans .ie united or Humana. Medicare bills the service, not you for the the huge paperwork. Thats doctor visits, drugs, dental and eye care. Visits are zero deductable and $3000 a year for dental. Prt B is actually better than while I was working.
Eagler do some research. I was surprised on what it covers at zero cost. Or 165 a month for part B.
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Eagler:
I've been retired since 2012. As far as pensions, those of us who were salaried in 1984, with the takeover by LTV, upon the merger, they took ALL management pensions. They also gave seven million dollars to the CEO of Republic Steel for assisting in a a smooth takeover. Ya right. They couldn't touch the Unions Pension fund. LTV went bankrupt not long afterwords, they knew nothing about Industrial Manufacturing. The merger was likened to a Guppy trying to swallow a Whale.
Anyway at that time I started a 401k with Fidelity and managed my own account. In 2012 when I retired at 62 I rolled the 401 into an IRA. I have a wealth advisor watch over my IRA. I don't worry about anything. He has been quite successful. I pay a small fee for his services. I started also at retirement to collect my social security. I live well thank the good Lord!
As far as medical I went to Anthem Blue Shield Blue cross. It was no cost They take what I pay for medicare and cover almost everything, including surgeries, medication and I pay a stipend per month to them for eye and dental care. I had serious surgery in 2018. For the surgery alone it was 44,000$. It was covered. I had to pay a few co-pays that were around 100 dollars that's it.
Look into Medicare Advantage plans such as BSBC etc. What you get may differ. Ohio uses BCBS and others. Look for your options a short while before you retire. Other Medicare advantage plans may be provided in your state.
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Eagler:
I've been retired since 2012. As far as pensions, those of us who were salaried in 1984, with the takeover by LTV, upon the merger, they took ALL management pensions.
Never ceases to blow my mind that pensions are cancelled with such ease in the USA. I see a retirement pension as compensation that was deferred during a working career.... but I am also a life long Union member (ALPA) and had management tried to attack our pension plan, it would not have been pretty.
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Anyone that takes SSI at 62 is crazy.
Not necessarily correct. Many factors at play.
Wait are you talking about SS? Or SSI?
For SS, you would have to live to at least 78-80 (I'd have to look it up) before FRA even begins to pay off. If you die at 77 it would have made no difference retiring at 62. See Time-Value of Money calc.
You either get more smaller payments starting sooner, or fewer larger payments starting later. At age 77 it's still a wash.
My philosophy is, if you like your job stay until they throw you out. If you hate your job, it is taking years off your life. Bail as soon as you can safely do so.
But life is short. Staying somewhere you hate for a few more dollars is a wasted life, IMHO.
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Inflation is a big variable. A dollar today is worth more than it will be in 20 years. Based on recent history. But, COLA increases are percentages so greater later. The SSA did the math but impossible to see the future is.
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Work while you can, the night cometh.
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Similar thing: if I won the lottery, would I take the lump sum up front, or the payments over time?
I would take the lump sum up front.
For two reasons.
1. I wouldn't trust still getting paid into the future. Maybe something in the system blows a gasket, and they don't have the money in the future.
2. Inflation might be huge going forward. If I take the money up front, I can put it into things that don't get destroyed by large inflation.
Disclaimer: I am not a financial analyst. These are my personal opinions, which could be completely wrong.
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My philosophy is, if you like your job stay until they throw you out. If you hate your job, it is taking years off your life. Bail as soon as you can safely do so.
But life is short. Staying somewhere you hate for a few more dollars is a wasted life, IMHO.
Here we agree CptTrips
It will be 6 years this July on what started as a 6 month contract I took after I would not relocate to Denver after a huge merge in 2017
Fidelity informed me that the lump sum goes down as interest rates rise...which was the opposite I thought would be happening :furious
I will work until they say to leave..which could be any moment or another 6 years :)
Just counting my pennies and reviewing options in case it happens sooner than later
Thanks for the info guys!
Eagler
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Fidelity informed me that the lump sum goes down as interest rates rise...which was the opposite I thought would be happening :furious
They are doing a "present value" calculation, looking at what they think they'll have in the fund at a future date with a given interest rate, and then discounting that value back to present. As a simplified example, let's say they think they'd pay you $1000 5 years from now, and they think they'll get total interest over those 5 years of 25%. Then they compute present value as 1000 x (1 - 0.25) = $750 is what your amount is today. The higher the interest, the lower the present value.
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I was a financial advisor for a large (Fortune 500) investment firm for many years. Private pensions (as opposed to government which are a somewhat different beast) are all based on annuities. I had a pension in that job and took it as a lump sum.
The downsides of annuities is that once you start getting payments they do not adjust for inflation over time. You get $X.xx today and still get $X.xx 20 years from now. The second downside is that annuities are invested conservatively to be sure to be able to meet their guarantee obligations. Finally, they are targeted to last through a persons lifespan as indicated by federal mortality tables (Around 85 for most American males). If you die before that you lose some of your (or your companies) contributions and/or earnings, if you die after that you win.
The plus side of an annuity is that the income stream is guaranteed to last your entire life, no matter how long you live with no additional investment required.
If you're conservative by nature, an annuity/pension is a great thing. If you're aggressive, you might be better off taking out the lump sum and investing more aggressively (that was the choice I made). You can always get a projection of monthly annuity/pension payments and compare to other investments you might be interested in and see what would work best for you over time.
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I converted one of my pensions to annuity it was 100 to 120k. don't remember exactly. so far I have received about 40k and my oldest son will get 375 after I die. not a lot of money but I sure will get more than the 120k.
I will retire at 62 as my health will probably be not that good then.
I just smile at people who tell me age 62 is a bad idea. while not for everybody neither is 67.
semp
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I converted one of my pensions to annuity it was 100 to 120k. don't remember exactly. so far I have received about 40k and my oldest son will get 375 after I die. not a lot of money but I sure will get more than the 120k.
I will retire at 62 as my health will probably be not that good then.
I just smile at people who tell me age 62 is a bad idea. while not for everybody neither is 67.
semp
Pension for what? You haven't worked since I started playing this game. 375k, not much? Maybe not in an overtaxed, over-regulated = overpriced state.
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Pension for what? You haven't worked since I started playing this game. 375k, not much? Maybe not in an overtaxed, over-regulated = overpriced state.
you misunderstood so much.
semp
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I see now I meant 375 bucks. I can see how you misunderstood. but I did mention 120k. I get 526 a month
would love for my son to get 375k but no way. only 375 perhaps a hamburger after I die
semp
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My recommendation is that if your in your 50s. Eliminate debt. Read it again. Make it a priority. Eliminate debt. And then save like crazy. Retirement doesn't creep up on you, you just blink your eyes and it's there. Decide what's important. A new boat, gun, toy isn't more important than saving money. And don't forget about medical insurance. Medical insurance, good medical insurance is a must have.
Being retired is great if you have money to take care of the basics and then some. Want to put a smile on your wife's face? Take on a trip you always talked about but never had time to do.
I'm fortunate, I'm retired military, I collect SS and I have other income. Deciding to take a trip with your partner to Europe or where ever when you feel like it, is great. I spent a weekend watching my favorite basketball team play in the NCAAs. Every few months we get bored and take another trip. Its so nice to do something knowing you don't have to worry about your job or vacation time.
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In Europe, retiring is different dependent on where you are living (read- pay tax).
In Sweden parts of your salary/earnings go into a retirement fund, that is accumulated and handled by private or government investment funds.
The second retire income will a private pension funded by your employer (not all do) will put into another fund.
The 3rd income is a private fund you pay with your own already taxed money (used to be exempted from tax, but not any longer).
Healthcare and hospital care are close to free, but dentist cost an arm and leg, 25% VAT does not help at all.
Remember Nordic countries are VERY heavily taxed.
When it's time to retire you can adjust when each and one of the funds will start to give you money from these funds.
ff you take out more than approx $5K before tax per month you pay 50% tax of every single dime you output to pensions on top of that instead of about 30%.
I'm 63 this year and probably wait another year or two until I don't need to see snow anymore.
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In Europe, retiring is different dependent on where you are living (read- pay tax).
In Sweden parts of your salary/earnings go into a retirement fund, that is accumulated and handled by private or government investment funds.
The second retire income will a private pension funded by your employer (not all do) will put into another fund.
The 3rd income is a private fund you pay with your own already taxed money (used to be exempted from tax, but not any longer).
Healthcare and hospital care are close to free, but dentist cost an arm and leg, 25% VAT does not help at all.
Remember Nordic countries are VERY heavily taxed.
When it's time to retire you can adjust when each and one of the funds will start to give you money from these funds.
ff you take out more than approx $5K before tax per month you pay 50% tax of every single dime you output to pensions on top of that instead of about 30%.
I'm 63 this year and probably wait another year or two until I don't need to see snow anymore.
I've read that Sweden's corporate tax rate is much lower than individual/personal tax rates, and that Sweden has no minimum wage laws. This approach is likely what drives it's successful economy. The same capitalist economy crazy Bernie touted on the campaign trail a while back.
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Not entirely true, minimum wages are set by sector or industry through collective bargaining, Swedes also get 25 days paid vacation each year.
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Not entirely true, minimum wages are set by sector or industry through collective bargaining, Swedes also get 25 days paid vacation each year.
Sounds like a union rather than a government conceived, across the board base wage. Was I correct about tax rates?
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yes companies have low tax, and us working in the Nordics have the highest tax rates in the world.
In short, you don't get very rich as an employee, but you have a high safety net if you get get caught with sickness or unemployment.
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With the interest rate hike the payout of one of my pensions has dropped over $25,000 since the last estimate :O
Eagler