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early pension

Posted by bill_h (My Page) on
Mon, Mar 24, 08 at 16:50

my wife will have to retire in two weeks she is 51, and has enough time to get her health benifits, 402k and pension. shes going to roll over the pension, but we wonder about the pension? they said she will get 980.00 a month for the rest of her life, how will that be taxed? she dosent really want to go back to work full time, not to mention here in the detroit area, there probably isnt any jobs anyways. can she work part time? will they tax the pension money to nothing since she only 51.

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RE: early pension

Unless the pension is exempt for some reason, and most are not, the pension will be taxed like ordinary income. So figure that it's like a salary. The same federal income tax rates apply. State income tax is different for each state. Some states don't tax pension at all, and some tax them at a reduced rate, and some tax public pensions at a different rate than private pensions. Check with the state of Michigan website to find out. Your working should not affect your pension amount. Good luck.

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