Accessing pension monies
I am 60 years old. As I understand it, I could now begin to annuitize my pension monies while still working and even still contributing.
Does anyone have any suggestions to me on what issues to consider in deciding if I should now begin to tap into my pension?
If you are contemplating starting to withdraw money from your pension here are some things to think about:
1. Taxes – will you pay more in taxes now or later. Tax rates may go up with all the new debt and taxes could be lower now. Be sure to look at the NPV (net present value) of all future money flows and think about the real inflation rate vs the reported.
2. Investment opportunities – are they doing a better job at investing your money than you could do? Keep in mind that you may have to do much better than them due to #1 above.
3. What do you want to do with the money? Roth IRA, spend, invest, prepare for a crash?
4. How long will you live and what are the NPV’s of the possible withdraw secnarios under each death date? We all like to think we will live to be 100 but we have to be realistic.
That should get you started.
Thanks for the thoughts.
In answer to your number 3, I am looking for ways to prepare for a crash.
The company that sells you the annuity will tell you how long you have to live 🙂
Can you purchase an annuity in a different currency i.e – £500 or Euro 680. ?? That is what I would want to know first, how to get my monthly pay check in a currency other than USD.
I have no idea about the level of protection you may or may not receive if you purchased abroad, nor the tax implications. Certainly in the UK you can take your pension fund to purchase an annuity and that is tax free. As a pensioner I think you can have a considerable income from pension funds before tax, again UK.
I think a pro advisor is a good move. You want the advisor who does all the rich guys. 🙂
I have the names of a couple of financial advisors who have both taken the Crash Course, understand it completely, and are capable of navigating this new economic landscape better than most (by far).
They are more than happy to receive phone call inquiries.
If you are interested, email me at [email protected] and I’ll send you their contact info.