Friday, April 15, 2011

Selecting Your Pension Option At Retirement


How To Take Advantage Of What the Plan Is Assuming About You! For most individuals, their pension is a very significant part of the overall assets at time of their retirement along with their home, social security and some personal/retirement account savings.

In deciding how to take your pension among the choices offered under your pension plan, the fundamental decision is whether this pension asset needs to be available not only for yourself but for your spouse and/or other beneficiaries to live on after your death or to provide for some estate/inheritance that you wish to leave behind as well.

For this fundamental purpose, you may very well want to speak with your accountant/financial advisor. There are reasons why it may not be necessary to have your pension provide income to your spouse or beneficiaries. This may include the fact that your spouse has their own pension/retirement assets and doesn't need any portion of your retirement income or your pension is not a significant part of your overall combined assets. But this is not the situation for most individuals. For purposes of this section, it will be assumed that you want to provide continued income to your spouse from your pension or leave an estate and that you are trying to maximize those amounts by selecting your pension option in the most advantageous way. Given this as the goal, and based on the information described in the section What the Plan is assuming about you in charging you for selecting a pension option, you should consider the following factors in determining how to accomplish maximizing the value of your pension asset.

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