I worked for my first employer after college for nearly 10 years. I left the company two years ago. With my service, I accumulated a small monthly pension that I can collect when I retire (they ceased offering defined benefits to their employees about one year before I left). Recently, they sent an offer that explains that I have the option to:
- Take the lump sum now (not seriously considering this option - it's about $17300)
- Start taking a $60 monthly annuity now which will last until I die - obviously a much smaller monthly payment, but a much longer time horizon (I hope!)
- Stick with the original plan and not take the annuity until I am somewhere between 55-65. Obviously the benefit level varies depending on when I start taking it, but the range is $230 at age 55 to $580 at age 65 (midpoint of $400 at age 60).
I have until mid-August to make the decision. Here are some details about me:
- I'm 32 and single with no dependents
- I currently max out my 401K contributions, so along with employer match I contribute ~$25K per year. I have around $150K in my two 401K accounts cumulatively.
- I'm a homeowner with a mortgage payment around $2K a month
- No debt other than my mortgage and make ~$140K per year.
- I'm not the type that tries to spend every dollar that comes my way, so not too worried about just burning it as it comes.
So what say you personal finance experts. Do I try to invest this $60 per month in hopes of beating their time discounted valuation? Or leave it as is, and collect sometime between 55 and 65?
Submitted July 24, 2017 at 01:13AM by HippieHapa http://ift.tt/2vA9WFv
