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Retirement Pension

By Terry Savage on March 28, 2016 | Financial Planning / Retirement

I am 54 yo and retired. My husband passed away and his death benefits support me. When I turn 55 I can start collecting my pension also, of an additional $909 monthly. Do I collect this now or wait. I do not NEED the money, but doing the math. At 65 yo I will have collected more money at the lower rate for longer time then waiting and collecting a larger sum of money later.

Terry Says:  That decision depends on two things:  a) the  amount of the increase in your pension for every year you wait.  Ask the trustee to calculate the “rate of return” on the increase as a percentage.  For example, every year you wait to  collect Social Security after age 62 gives you an 8 percent return on your money — far better than you could get in a safe investment like a bank CD!    But b) the second issue is your life expectancy!  If you had a hereditary disease, or already had a serious illness, then you might not live long enough to benefit from that greater return to be gotten by delaying benefits.  Go to www.Livingto100.com and take the life expectancy quiz to get an idea!   There is no one way to answer your question, but doing the math for both a and b will help you make the decision.



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