TCCoA Forums banner

1 - 5 of 5 Posts

·
Registered
Joined
·
256 Posts
Discussion Starter #1
I've been wrestling with the idea of early retirement. My pension is good, won't be rich, but comfortable.

I was wondering that since I won't have paid insurance anymore, what company anyone here is using, and if it's not being too nosey, what your coverages are, and the monthly cost.

I know its high, but, I am looking around.

Thanx for any help.

Tweety
 

·
Registered
Joined
·
1,278 Posts
Look in to state specific coverage. I go through CA for mine. The reason I explain it this way, my buddy lives in WI. He pays less for premium but more for medication, ER visits, specialists ect.. Mine is based on my monthly income. If your pension is partially non taxed then you could get a good saving by sticking to state specific coverage.
 

·
Registered
Joined
·
2,634 Posts
Q: By state specific coverage, does that just mean converage that is issued in a specific state or would only cover incidents/needs in a given state?

I would be concerned that if you retire young(er), you might be more active and therefore more prone to travel and accidents outside of your home state. That would suck if that cost you more in the long run when you could have paid a tiny bit more on the premium side.

Q: One other thing to consider - how is inflation addressed with your pension? Is it locked to a specific metric or "whatever they decide".

Right now by all measures the US equity market is hot -- maybe too hot -- and due for a correction. When we finally get tired to locking interest rates at near zero and effectively stop printing money, inflation is going to hit the US market.

If you remove yourself from the workforce "early" and therefore bail out of any opportunity to lock in a higher starting pension, I'd be concerned if the cost of livings starts going up significantly and therefore the buyer power of your pension drops below what you currently consider as "comfortable".

Q: My final question for you is who pays your pension once you retire?
Pensions, esp govt ones, are historically underfunded. With an aging & shrinking workforce with fewer active workers doing more work, companies are looking at ways to cut their expenses as they see the costs of their retiree obligations climb (both cash obligations as well as medical costs). This is definitely true for govts esp when you see a few fat cats "spiking" their pensions in their last year to raise their pension payments and causing all sorts of anger towards even rank and file govt retirees.

This has already happened (ex: when various automakers transferred pension obligations off thier books onto the PGBC and got cents on the dollar).
http://www.reuters.com/article/2012/06/01/us-gm-pension-idUSBRE85014S20120601
http://en.wikipedia.org/wiki/Pension_Benefit_Guaranty_Corporation

And as you can see from the changes in the law, pensioned retirees (vs those with defined benefit 401Ks of their own money) should only expect this to grow.
http://money.cnn.com/2014/12/12/retirement/pension-cuts/

Q: To protect yourself, consider looking to see if there's a way to get a lumpsum buyout (or a conversion into an annuity). This way, your nuts aren't tied to the bigger bucket that is eyed by corporate management/taxpayers/politicians. No matter how hard you worked to "earn" a benefit, it's not "yours" until the $$$ are in your name.

If it's a Kansas govt pension, your state's experiment with cutting taxes is causing your state's coffers to hemmorhage money.
http://www.forbes.com/sites/beltway/2014/07/15/whats-the-matter-with-kansas-and-its-tax-cuts-it-cant-do-math/

If this is the only horse you have to tie your retirement income to for the next 30-50 years, well, good luck with that. If you decide to embark on a second career post retirement (say to run a business selling/making something you love, that's great). That would be a far better idea than HAVING to take a job a few years from now just to make ends meet.



-g
 

·
Registered
Joined
·
256 Posts
Discussion Starter #5
My pension will be a union pension. I just found out yesterday, that I can keep the insurance that I have now, for the price it is now. (Of course it will go up. Insurance does not stay the same forever).

I am gonna read the above sites that you have posted. You can never be "over informed".

Thanx for your informative input !!!

Tweety
 
1 - 5 of 5 Posts
Top