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Author: Hawkwin Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 75629  
Subject: Re: Pension info to consider Date: 10/5/2012 10:41 AM
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My recommendation*:

Take the pension at 65, single life.

The $35,000 is unlikely to grow enough to provide you the same guaranteed income amount at 65 that would last you the rest of your life.

Taking the income early is significantly penalized. *Assuming no Cost of Living Adjustments (COLA), that $170 a month would pay you $36,720 between now and 65. You would breakeven on those payments around the age of 72. Every year after that, you will have made more income if you waited until 72.

Take single life and use the difference between the single and the joint and have your husband buy 20-30 year term life policy on himself for $100k to $200k in death benefit.

This option would likely cost less that the $150 monthly difference. By using this method, you would get a death benefit if he dies early over that 20-30 yr period that you could then use to replace the $670 (or $500 joint life alternative). If you die first during that period, he simply cancels the insurance policy and his net income goes back up to the full $670. *This option does require that your husband be in good enough health that he would qualify for term life coverage at age 65. You could consider buying it prior to age 65 just in case.

For example, a 64 yr old male in good health can get $100k of coverage for about $94 a month for 20 yrs. They can get $200k of coverage for for 20 years at about $165, still cheaper than the difference between single and joint life.

You can take $670 a month from $100k for over 10 years and $500 a month would last you over 16 years, not accounting for any interest earned on the balance.

www.reliaquote.com and www.accuquote.com

When I ran the numbers for someone 65, it required that I call them for a quote so I had to bump the age down a bit.
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