retirement pension question

[TBman]

Originally Posted by rokdog49

Yes, but the OP is waffling on whether he wants/needs additional monthly guaranteed income right now vs. having a bigger pie for his heirs.
It’s not “having to take it out”. He already knows he doesn’t have to.

I already have someone that runs behind me "correcting" things I say - I'm married, but thanks

[Teleplucker]

Originally Posted by rokdog49

Yes, but the OP is waffling on whether he wants/needs additional monthly guaranteed income right now vs. having a bigger pie for his heirs.
It’s not “having to take it out”. He already knows he doesn’t have to.

That is correct. This year before retirement will be a year to collect realistic data on exactly what we need for monthly income. My wife and I have always been pretty sensible about what we spend. We do have some nice musical instruments but they are a justifiable business expense with our wedding music group. I've never owned a J45, maybe I should consider that
We have learned this year that we can cut way back on the costs of eating out in restaurants. We do want to maintain our lifestyle and do some traveling while our health is still good. That is all cooked into the budget.
We are all set on cars for awhile.
We also have savings in 401k investments and other outside investments. I suppose the numbers will have to show if it's better to rollover the pension plan and take money gradually from the big pie of investments or take the monthly payout from the pension and save the other investments.
From the information that my company provides the pension plan is adequately funded, but I suppose there is always a risk that could be an issue.
All of the payout options that go beyond a single life annuity reduce the monthly payout obviously. As catdaddy pointed out, I don't think I could take the lump sum and purchase an annuity with the same payout if an annuity is the way to go.
Lots of nice discussion and it sounds like many of you have been faced with the same decisions.

[Mandobart]

Originally Posted by Teleplucker

That is correct. This year before retirement will be a year to collect realistic data on exactly what we need for monthly income. My wife and I have always been pretty sensible about what we spend.

What we do is use our credit card for all basic purchases each month. We pay off the balance each month, so we never pay interest or penalties. The credit union issuing our card gives us a statement every year that breaks down our spending by category.

I also track our utilities, property tax, vehicle registration, insurance, etc.

Originally Posted by Teleplucker

I've never owned a J45, maybe I should consider that
We have learned this year that we can cut way back on the costs of eating out in restaurants. We do want to maintain our lifestyle and do some traveling while our health is still good. That is all cooked into the budget.

Most of our friends who've retired tell me not to plan on spending a lot less in retirement. I've included not just "normal" expenses, but inflation, average pension and SS COLA's, average investment ROR, etc.

Also remember you'll have to pay taxes. Budget for that too.

Originally Posted by Teleplucker

We also have savings in 401k investments and other outside investments. I suppose the numbers will have to show if it's better to rollover the pension plan and take money gradually from the big pie of investments or take the monthly payout from the pension and save the other investments.
From the information that my company provides the pension plan is adequately funded, but I suppose there is always a risk that could be an issue.
All of the payout options that go beyond a single life annuity reduce the monthly payout obviously. As catdaddy pointed out, I don't think I could take the lump sum and purchase an annuity with the same payout if an annuity is the way to go.
Lots of nice discussion and it sounds like many of you have been faced with the same decisions.

I'm looking at ways to roll 401k money into post tax accounts while minimizing taxes and meeting minimum distribution requirements.

As far as leaving money to heirs, don't forget about gifts. IIRC you can give each child $10,000 per year without their having to claim it. If you're able to roll it into an IRA for them it could prevent you from paying taxes on it and help meet minimum distribution requirements.

[rokdog49]

Best to remember you will need additional funds for things like increases in taxes, utilities, home repairs, replacements of household items and on and on.

Also, what’s your strategy for health care? That’s a biggie.