Ask Terry Questions Pension amounts –which to take

Pension amounts –which to take

By Terry Savage on February 27, 2021 | Financial Planning / Retirement

Hello miss savage I have a question about my pension. I am going to Retire early at 59 Due to personal reasons. My pension will be either $1503 a month increases to 1600 at 62 or I can collect $2370 for 3 years and then when I turn 62 my pension will go down to $1300. so I am not sure if I should just take the $1503 for the rest of my life it increases to 1600. or take the $2371 for 3 years and then take it goes down to $1300 Starting at 62 what do you recommend?

Terry Says

Well, for starters, I can’t imagine how you will live — assuming you think you have a regular life expectancy of about 78 years — on this small amount of money. And if your personal reasons are that you think you have a terminal illness, then you need specific financial planning advice.
You don’t mention Social Security, which is indexed for inflation. And you don’t mention any other retirement funds.
You don’t give me any indication of how you will pay for your lifestyle, and what your annual costs will be.
And you don’t tell me how you will pay for health insurance until you qualify for Medicare at age 65.

There are too many unknowns for me to comment. But here’s a thought: Even at only 3% inflation, the value of your fixed check will be cut in half in less than 25 years.
Honestly, I can’t help you make a decision — but I suggest you use the box on the top right of my website, “find a financial planner’ to get connected with a fee-only, fiduciary planner who is not trying to sell you something. the first meeting should be free — and you should get an idea of all the issues involved in making this irrevocable decision.

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