retirement question???

**firstlove** · 09-18-2007, 11:41 AM

My hubby and I have always lived paycheck to paycheck. Now-we finally have most of our bills paid off and are, at this late date, starting to save for retirement. We have about 10 more years to work. My question is-hubby is able to get a small pension from a former job-now-something like $220. per month--if he waits till he retires it goes up to $250. per month.--anyway, should we take that smaller amount now and invest it in an IRA or something? Or should we just wait and take the bigger amount later?

**leezza** · 09-18-2007, 11:57 AM

M,

I think I would suggest you talk to someone you really trust in the financial field! perhaps someone at your bank, your accountants that do your yearly taxes???? I would be very careful messing with something early......a bird in hand and all that. I bet some of the other folks have more idea's for you. Good Luck.

leezza

**frugal-fannie** · 11-03-2007, 01:35 PM

Originally Posted by firstlove

My hubby and I have always lived paycheck to paycheck. Now-we finally have most of our bills paid off and are, at this late date, starting to save for retirement. We have about 10 more years to work. My question is-hubby is able to get a small pension from a former job-now-something like $220. per month--if he waits till he retires it goes up to $250. per month.--anyway, should we take that smaller amount now and invest it in an IRA or something? Or should we just wait and take the bigger amount later?

How safe is the company he is getting the pension from? Will you get the pension if something happens to him? My feeling if you won't get it, if something happens to him is to start taking it now. Life is too uncertain. Also if the company is in an industry that is uncertain, you should take it now. Just my opinion.

**dcompton** · 11-03-2007, 04:31 PM

I second the idea of getting some professional advice. I think I would be in favor of getting it now since the difference is not very much -- with 10years an investment can really grow. But unless you are also quite experienced in investing, it would be valuable to get some professional advice on making what you have most effectively work for you. I don't have very long to prepare either, and recently I went to see someone who had been recommended to me and I feel much better about the whole situation. He explained things I was uncertain about, and was able to give me a real projection about how it was going to work out, which is a lot better than my guesses which were swinging between "this is going to be ok" and "this is going to be a serious shipwreck."

**frugal-fannie** · 11-04-2007, 03:36 AM

I frankly don't trust much advice from anyone who sells securities. I have a friend that everytime I turn around someone has sold her an annuity or life insurance.She doesn't get it that they make more money selling it to her than some of the other investments. I am also leary of the stock market right now.I pulled all my husbands stocks in his 401k to the money market, when the market was making new highs, after I see a major correction I will jump back in. The market has already started dropping so I will look for what I feel is a good pullback and then slowly start buying again.We had lost 50k in the stockmarket on our 401k and almost lost a lot more. I pulled everything out of stocks right before 911. Now I only go into the market selectively as my husband is close to retirement. I have one fund that they closed to new investors in my fidelity account and I leave it in that one,It seems to almost always make money. So just watch your funds closely. If they elect a more democratic congress and a Democratic President I will pull out of the market as I know it will go down. That is just common sense.

**McD** · 11-04-2007, 08:28 AM

While people do get a commission from selling annuities, they are actually a really good investment tool. My bank sells an annuity that guarantees a 6% return. You can't find that on c.d.s or money markets right now with the way the Fed keeps cutting interest rates.

**Nightshade** · 11-04-2007, 12:37 PM

Originally Posted by firstlove

My hubby and I have always lived paycheck to paycheck. Now-we finally have most of our bills paid off and are, at this late date, starting to save for retirement. We have about 10 more years to work. My question is-hubby is able to get a small pension from a former job-now-something like $220. per month--if he waits till he retires it goes up to $250. per month.--anyway, should we take that smaller amount now and invest it in an IRA or something? Or should we just wait and take the bigger amount later?

Take the pension now. The reason is that the longer you get the money
the more money TOTAL you'll get. Also when you get on the pension
rolls as an active payee you get protection under the PBC laws. If not
on the rolls as active you get squat if the company goes broke.

Take the money now.......

**Telephus44** · 12-23-2007, 04:53 PM

I ran this through a calculator on Bankrate.com.

You will make more than the $30 a month difference in payment amount if you can earn 3% in an IRA.

Me personally, I'd take the money and put it in an IRA.

**Daisysmom** · 01-03-2008, 03:03 PM

A few thoughts, are you old enough to get a distribution that can be rolled over? I work in this industry and usually you need to be 59.5 before you can receive a distribution from a retirement plan. If so, why would you want to take the distribution? Better return? Fearful that the company won't be around long term? A few things to clarify what people have said here:

1. Just because you are active payee does not guarantee your benefit. If that company has been paying PBGC premiums and went belly up, the PBGC would take the pension plan over pay out a portion of the benefit.

2. Larger pension plans get better expense ratio's than individual investors. Meaning you may be able to earn a bit more in an IRA, but if it costs you more, it's a wash.

3. Watch out for anyone guaranteeing you anything - it's just like life, nothing is guaranteed. Annuities are like individual pensions - they provide a monthly stream of money - they do have fees associated with them and if you had a lump sum then it would be worth it to invest so you know that lump sum would last your lifetime based on your life expectancy.

4. I laugh when people say that they pulled out of the market and put their money on to a money market. That is called speculative investing and usually you get burned. Why would you pull $ out of a down market and stop buying mutual funds or stocks when the price is cheap and then hop back in when the price is rising? I would rather buy stocks when they are cheap and hold on to them so the value can rise.

I would seek out a professional to review your finances and the best investment allocation for your circumstances. They will take in to account your assets, SS payments and pension and tell you what you need to do to retire comfortably. The unfortunate part is most people are afraid to do that in fear that they may not like what they see. Good luck in whatever you do.

**frugal-fannie** · 01-03-2008, 03:30 PM

I pulled out and missed a huge drop .thank you very much. I am now slowly putting my money back in , but hopefully missed most of the carnage. It is not for everyone. Some people miss the big runs up trying to time it but they can also miss the big losses.