Message Font: Serif | Sans-Serif
No. of Recommendations: 2
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,

Print the post  


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.
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.