|
|||||||
 |
|
|
Thread Tools | Search this Thread | Display Modes |
01-02-2009, 11:36 AM
|
#1 |
|
Registered User
Join Date: Jan 2009
Posts: 1
|
Invest on my own or wait for retirement benefit
Hi,
I recently finalized my divorce and am debating what path to take with the QDRO as it relates to my ex-husband's pension. I am 33 and am just beginning to set a plan for my retirement. I have the option of taking an immediate withdrawal from my ex's pension for about $9K or do nothing and take the benefit when he retires at age 65. The option to just invest the money myself is most attractive as I am also concerned that with the economy's current state, pensions may be the first things to go when times get difficult. My attorney advises me to wait and take the benefit at retirement. My financial planner advises to cash in now and start investing. Any thoughts? Your help is appreciated. |
|
|
|
01-03-2009, 02:09 PM
|
#2 |
|
Registered User
Join Date: May 2007
Posts: 124
|
Assuming your husband's pension plan is a Defined Benefit Plan, this would require more information to answer it properly, but here's how I'd go about it:
1. Make an assumption about annual earnings expected on the investment, pre-retirement and post-retirement. With this information, you can calculate how much money you'll get at retirement (just from the earnings. Don't touch the Principal in your calculation). 2. Compare the Pension's benefit at retirement to the benefit calculated above. From the hip, I'd leave it in your husbands plan. That advice is worth no more than what you paid for it though. : ) I transferred some money out of a state pension plan when I was 23. I now wish I have left it where it was. The payout was much lower than the present value of the benefit, but I didn't pay attention to that. |
|
|
|
|
01-03-2009, 04:27 PM
|
#3 |
|
Registered User
Join Date: Jan 2007
Posts: 1,084
|
My opinion differs from Fender. I would advise you to think about the non-financial -- having to wait until he retires puts the burden on you to keep track of him. If he moves to another job, does he transfer his 401K? If he quits, is he vested? -- does that vestment carry over to retirement age, or does he take a cash-out? The thing is, if you want to be totally separate from him, I'd take the money now -- you're looking at waiting 30 years or more, where you'll have to keep an eye on him. This is if you wait to claim your QDRO -- if you claim it now, it means having to tell his employer every time you move, change your name (through remarriage), change your beneficiaries, etc.
The question is, how much of a pain in the bee-hind is this going to be? If you think it's not much of a pain, I'd stick with his plan. I'm assuming by "pension", you mean a government pension, which are pretty darned sweet! If it's a corporate pension -- the kind that could go the way of the dinosaur before the end of 30 years -- then I'd take the money and invest it yourself.
__________________
"Wealth is the slave of a wise man. The master of a fool." -- Seneca |
|
|
|
|
01-05-2009, 04:13 PM
|
#4 |
|
Registered User
Join Date: Mar 2007
Location: Ohio
Posts: 324
|
9k is too low.
Less than 25% of current expenses I am guessing. If you can get the 9k higher, take the benefit (one years expenses would be where I would think you should be at for investing at age 33). You do need to start investing. Get 1 years expenses invested now. Every 3-4 years that should double 2 years expenses at 37 4 years expenses at 41... 8 years expenses at 45... and so on. Go for 1 years expenses. I agree with puck's comment- you will not want to chase your XH down in 32 years to get the benefit (what if he dies before then)?
__________________
Light is faster than sound. That is why some people appear bright until you hear them speak. |
|
|
|
|
01-06-2009, 11:37 AM
|
#5 |
|
Registered User
Join Date: May 2007
Posts: 124
|
The $9,000 probably represents a much lower, benefit compared to the benefit at retirement, and I'm not just referring to time value of money.
When I cashed out at the state (eons ago), they gave me principle only. No interest or earnings. Perhaps that rule has changed. Puck and Jim have very good points that should be considered. Perhaps these questions should be asked of the HR Dept. Are your retirement benefits with this Pension plan dependant upon what your Ex does in the future? Probably not, but you should find out. Can he cash out your benefit? Again, probably not, but you should ask someone who knows, and perhaps get it in writing. |
|
|
|
|
«
Previous Thread
|
Next Thread
»
| Thread Tools | Search this Thread |
| Display Modes | |
Linear Mode
|
|
Similar Threads
|
||||
| Thread | Thread Starter | Forum | Replies | Last Post |
| Help me invest properly! I seek your help!!! | primetime | RETIREMENT | 14 | 10-09-2007 11:27 AM |
| Invest $7,000 now or wait till I have $30,000? | usgyopo | GETTING STARTED | 9 | 07-03-2007 05:33 PM |
| NEW Sogo Invest: $3 Trades | Grant | Online Brokers | 2 | 08-03-2006 09:41 AM |
| To invest or not to invest in 401(K) | addybo | RETIREMENT | 1 | 05-26-2006 02:47 PM |
| Should I begin drawing on my defined benefit retirement or wait? | Unregistered | RETIREMENT | 1 | 02-17-2004 12:23 PM |
SPONSORED LINKS
Powered by: vBulletin Version 3.0.1
Copyright ©2000 - 2009, Jelsoft Enterprises Ltd.
Copyright ©2000 - 2009, Jelsoft Enterprises Ltd.