retirement benifit choices

jet_nySeptember 22, 2004

Hi, glad to see a lot of familiar names here from the KT. Mind if I join? Mainly i have questions regarding my options here. This is from one company I worked for for 10 yrs, (left long time ago) that has a pension plan and recently offered early retirement benifits so I took it. I am still working part time about 15 hrs/week but I consider myself retired.

My early retirement packet just came and there is a bazillion choices to make. I hate choices it gives me a headache because I always make the wrong one.

I can't take it in one lump sum and here are a couple of choices I am considering. I don't want to make hubby my benificiary bec he is the same age as me, but if I did, I get more money monthly ($514-537/mo). I can only elect one benificiary and I have 3 offsprings so I can't choose any of them.

1. My favored one...Take 50% lump sum ( $42,637 minus 20% witholding = 34,000+)

> to avoid 20% tax witholding I must roll over to my Ira etc....Do I want to? I don't really need the money right now, but can I get it right away from my IRA if I need it? As I'm writing it a rollover becomes more attractive to me as I'm still working.

>with this option I can elect to recieve the remaining benifit as $281 per mo with no benificiary or:

>Certain & Life 10 years payment of $274 per month for the remainder of my life. In the event of my death prior to 10 yrs, my elected benificiary will receive this amount until the 10 yrs is up.

2. No lump sum

>$562 per month without a benificiary or

>Certain & Life 10 years payment of$548 per month for the remainder of my life. In the event of my death prior to 10 yrs, my elected benificiary will receive this amount until the 10 yrs is up.

3. 25% lump sum

> (21,318) lump sum to rollover to my IRA and the balance either:

>$422/mo with no benificiary or

>Certain & Life 10 years payment of$411 per month for the remainder of my life. In the event of my death prior to 10 yrs, my elected benificiary will receive this amount until the 10 yrs is up.

I have other retirement plans of my own and Dh has his also so this will not be the main source of funds when the time comes for full retirement.

I welcome any thoughts or advice in this. Thanks.

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gandbb

I guess I want to know first the source of the pension funds. Does the company have the money invested in independent entities such as Fidelity or Vanguard or does your receiving a pension depend on thecompany's continued financial success? IF the latter, how stable do you judge the company to be.

    Bookmark   September 22, 2004 at 6:55PM
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jet_ny

I didn't even think about that. I worked in a hospital and the pension comes from a conglomeration of several hospitals in my state. I guess the money is invested in different areas and not in any one company. It's one of those type where I did not have to contribute and you just get vested after 10 years of service.

    Bookmark   September 22, 2004 at 9:18PM
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gandbb

well, I don't know how financially sound hospitals are in your area, but I know that several in mine are having problems. If the money was in an independent account, I would hold onto the whole thing, but it sounds like the hospital association could bankrupt out of their obligation. If that's the case, I would go with your favored option and roll into an IRA.

    Bookmark   September 23, 2004 at 7:27PM
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leel

Hospital funds are 403 (b). In the state of NJ, this WAS held by Metlife. This turned into a terrible mess, and it took years until I could get the whole thing out. I should add, this affected EVERYONE and not just me. After 10 years with the hospital, I get the grand amount of $204/month.

    Bookmark   September 23, 2004 at 11:53PM
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