Retirement Planning: pensions

by Lee
(Seattle, WA)

My husband and I have our own retirement plans from the same company. I plan on retiring at the end of this year and am confused as to what I should do about the payment. Is it best to take the single life annuity since we both have good retirement plans, or do the 50% beneficiary?

Wendy: No simple answer here (is there ever when it comes to retirement decisions)?

It all depends...

-- pension amounts based on service/income
(equal pensions or one is lots more)
-- ages
-- health
-- general financial status

Most financial planners will do free consultations... mostly about investments (hoping to invest for you). You can take their advice or not. Bottom line: its your decision and nobody else can make that for you.

If you care to, write to me using the "contact me" at the bottom left so I can write back privately. If I knew a bit more, I can give you some scenarios to consider so you simply think about whats right for the two of you!

Best Wishes! Wendy

Comments for Retirement Planning: pensions

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Bottom line: its your decision and nobody else can make that for you.
by: Retd. Prof. Mr. Durgesh Kumar Srivastava, New Delhi, India.

I have borrowed Wendy's words as the title to my comments. Why? Because it is the best advice that anyone can give to you in your situation. Let me illustrate my view with an actual incident.

A soon-to-retire colleague was driving me to my home in a gesture of kindness when I asked him about his forthcoming pension.

He said in Hindi: "Arre usne hum sab ko marwa diya !" (Oh, he has taken us all to the death row !"

I did not understand what he had said. Then he told me that a group of 40 -50 colleagues went with their Pension Option Forms to submit in the office on the last date of exercising the option. A senior colleague sitting in the office interfered with the submission of their options and impressed upon them all the foolishness of their options. He convinced them that the "NO PENSION" option was much better for them since they would get a huge lump sum payment which they could invest and earn handsome interests. Then he snatched the bundle of option forms from their leader's hands and tore these up. So these colleagues were forced to go with the NO PENSION option.

Later, that senior colleague got his own retirement, and some how died within a few months of his retirement. When the deceased's wife came to the office to collect her family pension, the rest of the colleagues were shocked to discover that the deceased had himself taken the Pension option. He had fooled all these people to go for NO PENSION option while himself availing of the PENSION CUM FAMILY PENSION option.

What would you say about this incident? There are, in this world, some people who are ready to misguide others just for the sake of their own sadistic pleasure.

Consult a financial planner. Sit down with his calculations and consider these yourself. Send all these calculations to Wendy. And, in the end take your own decision. you will be happy that you decided yourself.

When you get your retirement amount, keep this a secret from everyone. Put it at once in a 3 month fixed deposit in a bank. Thus you get 3 months time to decide logically. A hurried financial or investment decision should be avoided.

Best Wishes. DKS,17.10.12

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