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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.

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