Taking pension: What would you choose and why?
OK, here is my scenario, and I'd like to generate ideas on which I should choose and why. I will add that this is forward looking, but if all remains the same, which would be the better choice.
I am 51, and have earned a pension from a major US employer that I worked for for 12 years. ( I still work for a different company, and will also earn Social Security when the time comes).
So, 4 years from now, when I turn 55, I can take a "reduced benefit" of this pension and receive just over $800 monthly for life.
If I wait until I am 62, in 2018, I can take the pension which will be just over $1200 per month. If I wait until I am 65, in 2021, that amount remains the same for some reason.
So, that is $400 month difference for waiting the 7 years until I turn 62. That is about $33,600 I would never see.
I'm sure there is some formula for computing whether it is better to take the reduced benefit and enjoy it sooner, or how long it takes to make up that $33,000....I just don't know it!
I am in good health, don't smoke, and family history has us living well into our 90's, (hope that is true for me!!!)
Part of me says "take the money ASAP in case they ever decide to terminate the entire pension plan like some companies do". The other part of me says, "wait, take it at 62 and have more financial security per month". NO part of me says to wait until 65, since the amount is the same at 62 or 65.
My social security will be around $1500 at 62 or $2000 around age 66.
What say YOU about my pension?