Help me understand my pension numbers

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP here. Thank you so much guys will all the info.

I am using a free net worth tracking app, and what amount should I put under retirement? Maybe the $200k cash I will get if I leave now?

Don't know what you are asking here.

The app asks you to enter your balances in your HYSA, 529, 401k etc. So, I wanted to know since I don't have a 401k how do I value my pension?

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:OP here. Thank you so much guys will all the info.

I am using a free net worth tracking app, and what amount should I put under retirement? Maybe the $200k cash I will get if I leave now?

Don't know what you are asking here.

The app asks you to enter your balances in your HYSA, 529, 401k etc. So, I wanted to know since I don't have a 401k how do I value my pension?

IMHO, calculating NW is a fool's errand. It may make you feel good, but it really serves no useful purpose. If you include pension, would you include future SS? If you really want to include, you can use 4% rule someone explained upthread.

[Anonymous]

Is the $200k tax free? Will you get yearly pension amount and also lump sum? Usually it's one or the other. You do say both. I'm confused.

[Anonymous]

Anonymous wrote:Is the $200k tax free? Will you get yearly pension amount and also lump sum? Usually it's one or the other. You do say both. I'm confused.

Some do offer mix of pension + lump sum vs larger pension (no lump sum) vs larger lump sum (no pension).

[Anonymous]

Anonymous wrote:Is the $200k tax free? Will you get yearly pension amount and also lump sum? Usually it's one or the other. You do say both. I'm confused.

OP here. My contribution is tax free. But the interest is taxable at ordinary income. But if I transfer that portion to a traditional IRA I won't have pay taxes (I think not sure) during the transfer.

I I Leave now I have 2 options. Either cash now ($200k) or a lifetime pension of $25k at 62.

[Anonymous]

OP is not married. Shouldn't they take a lump case in most cases? Otherwise should they die, their heirs won't inherit any of that money. If they are married, then their spouse will inherit 1/2 their pension.

[Anonymous]

Anonymous wrote:OP is not married. Shouldn't they take a lump case in most cases? Otherwise should they die, their heirs won't inherit any of that money. If they are married, then their spouse will inherit 1/2 their pension.

The person's first priority is to take care of themselves. They could spend down a 200k lump sum rather quickly (probably before retirement age), but the 25k for life will be there for them if the pension is secure, which combined with SS and hopefully whatever they can save, gives them a decent income. He can leave whatever savings he has left to his son. If he has 200k + SS for the rest of his life, it's not likely anything will be left for his son anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP is not married. Shouldn't they take a lump case in most cases? Otherwise should they die, their heirs won't inherit any of that money. If they are married, then their spouse will inherit 1/2 their pension.

The person's first priority is to take care of themselves. They could spend down a 200k lump sum rather quickly (probably before retirement age), but the 25k for life will be there for them if the pension is secure, which combined with SS and hopefully whatever they can save, gives them a decent income. He can leave whatever savings he has left to his son. If he has 200k + SS for the rest of his life, it's not likely anything will be left for his son anyway.

PP here. Thanks. You gave a clear explanation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Is the $200k tax free? Will you get yearly pension amount and also lump sum? Usually it's one or the other. You do say both. I'm confused.

OP here. My contribution is tax free. But the interest is taxable at ordinary income. But if I transfer that portion to a traditional IRA I won't have pay taxes (I think not sure) during the transfer.

I I Leave now I have 2 options. Either cash now ($200k) or a lifetime pension of $25k at 62.

Wait, why are we leaving? It's a good job, but definitely $200k cash no minus taxes versus $25k at 62.

[Anonymous]

Stay at the job. Forget about the 401k. It's not a good account.
Time for you to start investing on your own using Roth IRA and a regular investment account.
I invested $200k on my own and retired 5 years later. Had I used a 401k for that money, I'd still be working.
I'm going to leave the pension thing alone as I still don't understand the numbers for different ages. I also don't know what happens to it if you pass away early.
I don't believe OP is going to spend the $200k.
That money could be $800k by 62 nearly tax free if invested well.
Op, keep the job, learn about personal finance, stay healthy, pass down the knowledge to your child, and make sure they start investing early.
You also didn't say the age of the child and if you file as HH.
Long story short, learning to invest and getting your child started early has better returns than anything I can think of.

[Anonymous]

But you can also open a IRA and start saving in that on top of your pension! And great job on the emergency fund! Make sure it is in at least a high yield savings account.

[Anonymous]

Check the terms of your pension. Some allow you to designate survivor rights (usually one-half of the pension) to a non-spouse, e.g., your child. You will receive less in pension if you take this route (just as you receive less in pension if a spouse is designated for survivor rights). How much less is determined actuarially taking into account the age of the survivor.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Are you a man or a woman? How old were your parents or grandparents when they died?

OP here. I am a man. My grandma on my moms side is still alive. I think she is 95. My Grandpa died when he was 85. On my dad's side though both his parents died by 80.

Just take the pension. Don't take a lump sum payout. You'll be glad you did.

[Anonymous]

OP, I am going to repeat what others have said. Stay in your job. Ride it out for the next 20 years. You will have a comfortable retirement between the guaranteed pension and social security. Do not quit this job.

If you can, I would also start a IRA account. But keep the pension going. Do not cash it out. Not many people are able to wisely invest the 200k and have it grow as well as a pension fund would.