Monday, October 26, 2009

Personal Finance: The price of putting off a pension

Question: I have a pension that is available to me, and I wonder about beginning the pension now or waiting. If I take it now, I will get $1,183 a month. By waiting, it increases about 7.5 percent each year to a maximum of $2,071 a month at age 65. I am not in need of the pension at this time. - Gary, Baltimore
Answer: You are wise to be analyzing the possibilities rather than taking what's in front of you now and hoping it works out later.

Research shows that only about a third of people try to calculate what they will need in retirement before leaving a job or starting to take a pension. Years later, bad decisions can catch up with them: Once you take a pension, you cannot go back to your former employer and request a do-over when money is tight. And you might not be able to return to work to cover unanticipated living expenses.

The AARP surveyed retirees a few years ago and found that almost half worry about paying their utility bills. This could have been avoided.

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Posted by Kelsey Hoffman

1 comment:

  1. I think its interesting how some people don't necessarily know how to plan for retirement. - Nicole Nelson