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Author: reallyalldone Big funky green star, 20000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121598  
Subject: Pre tax accounts Date: 9/2/2001 10:01 PM
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Last week I went to a preretirement workshop at my husband'a workplace to learn about his pension plan. I was given some advice that conflicts with the advice I got at my workplace. I was told(at my workplace) that 3 years before you plan to retire, you should stop doing pretax health(& child care, if applicable) accounts. This would give me the highest average salary from which to retire. When I raised the question at the workshop last week, I was told they'd never heard of such a thing.

I work for a college covered by the stateretirement plan. He works for a corporation with a pension plan.

Opinions ?

rad
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Author: lorenzo2 Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53788 of 121598
Subject: Re: Pre tax accounts Date: 9/3/2001 12:45 AM
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Last week I went to a preretirement workshop at my husband's workplace to learn about his pension plan. I was given some advice that conflicts with the advice I got at my workplace. I was told (at my workplace) that 3 years before you plan to retire, you should stop doing pretax health(& child care, if applicable) accounts. This would give me the highest average salary from which to retire. When I raised the question at the workshop last week, I was told they'd never heard of such a thing.

I work for a college covered by the state retirement plan. He works for a corporation with a pension plan.


This doesn't sound the least bit odd to me. You and your husband work for two different outfits: you for a college, covered by a state government retirement plan, and he for a private corporation. The two pensions are determined and defined differently. Your pension apparently amounts to a percentage (probably based on length of service) of the average of your three highest salaried years. (I'm very familiar with that kind of pension; I am retired from federal government service, and that's exactly how my benefit is calculated...) Your husband's company must do things differently - it's as simple as that.

Bottom line - you should listen to the advice you get from your place of employment, and he should listen to the advice he gets from his place of employment. Don't try to apply your rules to his pension, or vice versa! Of course, there are a few things that you do have to coordinate between the two systems, like which health coverage you carry into retirement... Good luck, and here's hoping you and your husband enjoy your retirement as much I and my wife enjoy ours!

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Author: pmarti Big funky green star, 20000 posts Home Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 53790 of 121598
Subject: Re: Pre tax accounts Date: 9/3/2001 2:49 AM
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I was told(at my workplace) that 3 years before you plan to retire, you should stop doing pretax health(& child care, if applicable) accounts. This would give me the highest average salary from which to retire.

As has already been mentioned, the plans can have different calculation methods, so you need to base your actions on your plan. I just want to mention that, as you prepare for retirement, you'll hear a lot of things from a lot of people. Make sure you base your decisions on accurate information.

There should be printed material telling you how your benefits are calculated. Use that as your definitive source.

Phil Marti

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