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Strategies & Market Trends : Dividend investing for retirement -- Ignore unavailable to you. Want to Upgrade?

To: Elroy who wrote (9036)	5/17/2011 10:04:32 AM
From: alanrs	Respond to of 34328

I took a pension early with reduced benefits as a result (more potential years of payout, less per year). Covers about 35% of what I could expect to make. The specifics of the plan would matter some, maybe without the reductions would cover 50% so the lump sum might be the equivalent of 7 years wages. I actually have a pretty good pension for the private sector. ARS

To: Elroy who wrote (9036)	5/17/2011 10:18:53 AM
From: Jim P.	Read Replies (1) \| Respond to of 34328

I have a private pension. Most pensions are based on an 8% return on investment then the payouts are based on life expectancy. It works out at my employer to accruing 2% a year of highest 3 year average base wage. I pay in 9% of my base wage (2080 hours). I will have 22 years in so 44% of final highest three average salary or I could cash out. Most cash outs do not make sense as the payout in my plan is equal to an 8% payout of the phantom 8% return on monies placed in the pension. That is without survivor benefits. I guess if you thought the promise was not going to be fulfilled then cashing out would make sense. Survivor benefits lower the payout to 80%. There is no way I could replace the annuity in the private market or by myself with the 8% payout. Of course I plan to exceed the average life expectancy of my peers as we must. I do not know if my pension is normal just my own web surfing gave me the 8% number and when plugged into my pension it was right on. Jim