UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next
Author: rensimer Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 81641  
Subject: Re: Should Sister-in-Law Tap Money Date: 7/18/2000 5:44 PM
Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Recommendations: 0
My sister-in-law turns 50 this year and she can receive a reduced pension from her first job she had years before. If she waits until 57 yrs. of age she will receive $1050 per month or is she taps it now she will receive $609 per month. She doesn't need the money to live on. Would she be better off to wait or take the reduced pension and invest it in the stock market now.

Her break-even age (the age at which waiting to take the full pension will start providing more total payments than taking the reduced pension early) would be 66 years and 8 months. If she truely does not need the money to live on and could reliably invest that money each month in the market (she'd automatically be dollar cost averaging), then the compounded returns over 16+ years and the tax favored treatment of capital gains should provide her with a nice nestegg at that age, which she could draw down (or not, if she desires) to make up any shortfall in her pension payments at that age.

Post New | Post Reply | Reply Later | Create Poll Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (4) | Ignore Thread Prev | Next


The Retire Early Home Page
Discussion on accelerating retirement day.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.