Personal Investments • Help us select a pension option

Hi folks,

We are planning to retire in 3 years. Wife is a public school teacher in CA and will get a pension, but no SS. Husband will get SS.

Here is some background:

• Ages: Wife 52, Husband 49
• Ages (at planned retirement in 2027): Wife 55, Husband 52
• Current Portfolio size: $3MM (note that we expect close to $800k added to this portfolio when we sell our current home in 3 years. Retirement home has already been purchased). Rough breakdown of the resulting $3.8MM will be $1.6MM taxable, $1.7MM tax deferred and $0.5MM Roth.
• Expenses in retirement: $200K (this is very generous and includes over $70k in discretionary spending that can be cut down)

Retirement income will come from 3 sources

1. Portfolio withdrawals
2. DW's pension (see details below) - $90k
3. DH's SS (collected at age 70) - $48k

DW's pension amount will depend on when we start collecting and what beneficiary option we choose.

1. "Annual Pension (no beneficiary)" means DW will get this pension as long as she lives. If she dies before DH, he gets nothing.
2. Annual Pension (xx% beneficiary) means DW will get this pension as long as she lives. If she dies before DH, he gets xx% of this amount. If he dies before her, she gets the full "Annual Pension (no beneficiary)" amount.
3. There is no increase in pension beyond her age 61.

Questions:

1. Is it financially a good move to wait until she turns 61 to get the maximum pension in this case? This will mean the first 6 years of our retirement will be entirely supported by our retirement portfolio.
2. They are both in good health but there is a greater longevity on her side of the family. Should we forego the beneficiary options and just go for the maximum pension where he gets nothing if she passes before him?
3. Any other things we should consider?

Statistics: Posted by lifebeckonss — Wed Jul 24, 2024 8:54 pm — Replies 2 — Views 421

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