Early Retirement – Navigating the Gap Years – Understanding Your Pension

Early Retirement - Navigating the Gap Years - Understanding Your Pension Steve Campbell & Travis Maus 36:51

What is a pension

A pension is in a lot of ways like Social Security. It is a benefit you have earned and are entitled to at some point.

However, pensions can differ from Social Security in a lot of ways. Credit Risk of the underlying institution and more distribution options, such as

Examples:

Period Certain,
Pop Ups,
Higher Early Benefits,
Single Life,
Options for Survivor %

Common to have a cash-out option, more survivorship options, and less likely to get a COLI

Like Social Security, when selecting benefits, you must consider different variables. Because pensions offer different options, it is more complicated.

Examples:

Cash-out option – needs, tax brackets, other assets, investment profile
Survivorship – survivor needs, other alternatives for the survivor, reduction on benefits due to survivorship option
Credit Risk – you are tethering yourself long-term to the financial management of the entity backing the pension
Early Retirement – pensions are designed (specific to each institution) to promote the Retirement behaviors that the entity desires. For every pension plan, there is a sweet spot. That is where you can get the maximum benefits you are entitled to. There are often cliffs built in. So if you are too early, you get a significant reduction, penalizing you. And if you are too late, benefits flatten out and stop growing, essentially giving you no additional value to keep working.

A Real Example of Planning At Work! Retiree age 55 with a cash option pension, cash, IRA, and 401k.
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Steve Campbell Podcaster | Business Owner | Husband | Father to Four

Based on lessons learned during the 2008 Financial Crisis and extensive professional experience, Ditch the Suit’s was a response to the panic induced by the COVID-19 Financial Crisis, where a collision of social fear and financial volatility, fueled by the politicization of nearly every issue, seemed to tip the world upside down. With the goal to help people avoid making financially destructive decisions, co-hosts Travis Maus and Steve Campbell produced daily recordings on a wide range of topics, such as staying positive, understanding the financial impact of new legislation, how to take advantage of the stock market when it crashes, blocking out fear-mongering, etc. which eventually gave way to the creation of the Ditch the Suits Podcast.

Ditch the Suits has become more than a podcast – it’s become a movement. Travis and Steve share their experiences and industry insights in order to help you make one good financial decision after another.

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