Retirement Age

by Jim
(Potomac, MD.)

I was retired by my company last June when the company was preparing to split into two separately traded public companies.

I am entitled to a pension. I worked for the company for 26 years. I am 63.

I know the longer I wait the higher the monthly amount which amount depends on no beneficiary or leaving a percentage to a my spouse for her life.

In either event, do I wait until 65 or later or do I take it now knowing I get less monthly later down the road instead of waiting.

Having said this, if I start now I am at least two years of money being made. We have been dipping into an account for cash.

My wife works full-time but I was the bread winner. Take or wait?

Wendy: Never easy answers on something like this.

First, I do want you to question whether your payment is really increasing if you don't take payments. Under the defined benefit pension plan I worked with, the monthly payment amount is set at the time you leave work. If you aren't eligible, you are forced to wait until age 60. If you choose to delay payments at 60, you simply "lose out" on those payments.

Just call your former employer and ask for two estimates: what you'd get monthly if you start your pension immediately AND what you'd get at age 65. When you review the calculations, it's easier to play with the numbers yourself...

Once you see the two figures, you'll also realize, I think, how little the reduction is if you take the pension now (assuming you do take a reduction).

Social Security payments take something like 9-11 years to make up the difference lost - if you choose to wait to age 66, instead of the reduced amount at age 62.

Using savings scares the heck out of me! That's just my personal fear... I need that stash left for if and when I REALLY need it, when I can no longer work and have no other way out.

Again, no easy answers...

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