Near retirement/over 50 MUST READ!!!

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Anonymous said:
If interest rates climb, the lump sum on the annuity goes DOWN! Does anyone know by how much? With each percentage point? Will you retire early just to get a higher pension payout? Serious replies only.
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Yes and yes. That was why I retired at 55 after 30 years and took a lump sum. First I knew the formula is changing and you'll get less and less. I also opt against lifetime monthly pension check because, well, look at what is happening to Merck. I have not touched the principal amount since then and living off dividends and profit only.
 




Anonymous said:
I concur with this post on taking the lump sum if offered the opportunity and rolling it over to an IRA. By doing this, you avoid income taxes and any penalties. I had this opportunity and took it because I wanted to be in control of my retirement nest egg, not Merck. I don't know if things have changed with the pension, but if you opt for that route, it used to be should you die, your spouse would only receive 50% of the payout. You should double check but that was the primary reasons I opted to take the lump sum. Also, who knows what the company's plans are for the pension system and if Merck will transition to a 401K program. As for investment management costs, if you can find a financial planner whose fees are 0.5-0.9%/year of your holdings, that's a good guide. Anything over 1%, you're paying to much. I've invested through a trust whose management costs are on a sliding scale depending on what return and what my holdings accumulate. last year I paid 0.7% with an 12% rate of return. Plan on living on 4-4 1/2% of your retirement funds per year if you don't want to outlive your money. I took social security early as I don't have confidence in that system either. If you do the calculations, you'll find that the break even point on taking SS early (ie 62) vs. waiting 'til your 67 is approximately 15 years. In other words, if you retire at 62, it won't be until your 82 that you would have evened out the disbursement from SS by waiting 'til your 67. Good luck to all those who are facing this dilemma.
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Excellent advice. I did almost exactly the same. Your posting reminds me to re-visit with my financial adviser as soon as possible. I want to do a little bit better on the yield.
 




Anonymous said:
2012 report currently pension fully funded and insured by PBGC
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What does it mean? A friend's pension with Delphi was offloaded to PBGC and the monthly check was less than half of what it used to be. It pretty much ruined him.

I took the lump sum and rolled it over because I had and still do not have now any confidence that Merck will be around for too long. Yes, subsidized dental coverage is gone. The 1X life insurance coverage is gone. Express Scripts Medicare option is in. Merck retiree medical is getting uglier. Before any young people started calling us names, they are not free like what the UAW retirees are getting.
 








I agree that taking a lump sum is probably the way to go for most people. I would just make sure that the lump sum is 'competitive' with the monthly pension payouts over an extended period. Companies know pretty accurately the percentage of their retirees that favor a lump sum and will therefore calculate the lump sum to compensate for this.
 




I am not a richie. In retirement I will continue to be careful. My home is paid for and I will live on my pension and may get a part-time job if need be but nothing in pharma. It is too overly
regulated and pure misery. Then max out a bit on ss, and then 401 K. It is all in the discipline and not how much you earn but what you sav
 




Anonymous said:
I am not a richie. In retirement I will continue to be careful. My home is paid for and I will live on my pension and may get a part-time job if need be but nothing in pharma. It is too overly
regulated and pure misery. Then max out a bit on ss, and then 401 K. It is all in the discipline and not how much you earn but what you sav
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It's more than that...its also where you live.

Choose a high tax and high cost of living area of the country and you can expect anything you might have to be gobbled up at the speed of light! Your quality of life, your ability to make it to the real oldie years with a few cents goes Kaput!
 












Anonymous said:
I am not a richie. In retirement I will continue to be careful. My home is paid for and I will live on my pension and may get a part-time job if need be but nothing in pharma. It is too overly
regulated and pure misery. Then max out a bit on ss, and then 401 K. It is all in the discipline and not how much you earn but what you sav
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"max out a bit on ss"

Huh???????
 




















The longer one can hold out for SS the more $ you will take; 70 is great although most people like myself will be fine at their year of full benefits which fore me is 66. No, I am a Caucasion woman.
 




Anonymous said:
A lot of people without pensions at all or only a few crumbs of a pension are being forced into taking the SS at 62 and facing the penalty for working...its all about their need for money. They get whacked big time. Personally I don't know anyone who could delay using 401K till 70..That's wild...reserved for the Richie Rich crowd...

The crappy economy and not being able to get a job if you're over 55 or 60 is real...I'm
seeing highly skilled and educated people of these age ranges hitting stone walls. No job. Jobs are going to the kids...often less qualified, cheaper candidates who work a few years then move on......
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According to the Social Security Administration 75% of all persons currently collecting Social Security TOOK IT EARLIER than their Full Retirement Age. To me that means only 25% of the recipients were in a financial situation that allowed them to take SS at their Full Retirement Age. Your FRA is determined by the year of your birth. I was born in 1949, so mine is 66 years of age. And, no, I'm not collecting SS yet. That said, I'm sorely tempted to take it.

I'm working, and I'm underemployed. I make a whoppin' 12 bucks an hour. It's my wife's excellent income that is saving my ass. I got the crummy job I have because I knew somebody. Had that not been the case, I'd probably still be looking for a job. I'm almost 64, and I can tell you from first hand experience, there aint no employers interested in a crusty old curmudgeon like me.
 




















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