retirement planing / worried about pbcg payments
Hi Terry : I listen to you on wgn radio chicago .
I’m 65 and planning to retire at 66 i’m wondering what is the way to go , take company pension (which is guaranteed by the Pension Benefit Guaranty Corp) of $760 monthly for me ( 65 )and my wife ( 57)or get lump sum of about $150k and put it on conservative IRA . I got about $100k on IRA.
Thanks in advance .
Terry Says
Well, think of it this way: Your pension benefit will be paid out for your entire life (or your life and that of your spouse, which is the option you should choose.) An IRA would likely be depleted in your lifetime, not only by required minimum withdrawals, but because you might dip into it for emergencies. Of course, Social Security will also provide a lifetime benefit for you (and your spouse, getting half of your benefit — or her own if it is larger). So that is the base for your retirement income, and your IRA account can be invested more for growth. But please, wait until your FULL RETIREMENT AGE to claim Social Security.
As for guarantees associated with that pension payout, even if your former company goes bankrupt, here are the rules — and you’ll see you don’t have to worry! Your payout is well under the limit.
The Pension Benefit Guaranty Corporation (PBGC) has announced that the maximum monthly insurance benefit for participants in underfunded pension plans terminating in 2019 is $5,607.95 per month or $67,295 per year for those who retire at age 65.
