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|Subject: Re: Pension Plan Choices||Date: 2/24/2001 2:51 PM|
|Author: psmart||Number: 28089 of 82858|
Whenever you're considering a financial choice, you have to try a few what-if scenarios to compare that financial choice to another choice.
Ok, been doing that but am I looking at this stuff correctly?
A pension is a guaranteed income for life. What is your $11,000 currently doing? What is the range of values it could take on if you left it where it was?
That's the good thing - the lifetime payments.
It would be 16 years before retirement if I don't repurchase. The $11,000 at 8% would be $20,120 then.
In my estimates, I can draw $1700 per month in retirement - that's $20,400 annually, so the $11,000 is worth about a year's worth of pension payments.
(this is for figuring only - if I don't repurchase it's highly unlikely the $11,000 will be investing fully for that time so I would likely wind up *without* the $20,120 anyway!)
If I repurchase, I can start drawing the $1700 5 years earlier than if I don't repurchase.
Do you need disability payments? If so, how much would it cost to replace the disability benefit of the pension? Would you be able to save money by cancelling other disability insurance?
Hopefully won't need disability payments - but one never knows, and it's just another benefit. Won't purchase disability separately.
Are you planning to retire sooner? If so, what would the difference be in your benefit if you didn't repurchase?
Would love to retire 5 years earlier! This would also allow me to retire with 30 years (as opposed to 25)if I so desired to work on for the 16 years.
Am I on the right track with my figures?
If so, it's looking like repurchase is a good way to go.
Thanks again for the input-
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