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|Subject: Re: Buy out pension?||Date: 1/19/2004 12:39 PM|
|Author: HaltCatchFire||Number: 1811 of 5048|
Other posters have already shown that, from a time-value-of-money standpoint, buying years of service on the pension is a good deal.
I don't have any answers for you, but a few questions to ask yourself:
1. What if DH doesn't die on schedule? You (DW) will lose the life insurance aspect of the plan, and the pension income, if you should outlive him and he should outlive his life insurance.
2. What if you outlive DH and the insurance pays out. Can you live on just the insurance and Social Security?
3. Historically, inflation has run at 3% a year. That means you'll need 2x the money in 26 years. If your income does not increase with inflation, can you live with that? If you're in your 50s, you will likely live to see 2030.
My concern is that it sounds like DH is maximizing his retirement income at your expense. The plan to drain the 401(k) and IRA money pushed my thinking over that line. I might be off-base; I hope I'm wrong.
Food for thought,
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