Right on schedule – an amazing 32 years after starting at MegaCorp – pension and retiree health insurance information have arrived just before my 55th birthday. It’s like a golden piggy bank that was hidden away years ago has made a triumphant return.
Related: Ringing Up MegaCorp
I still have to dig into the health insurance information a bit, but the immediate surprise was that there were two envelopes for the pension, not just one.
Apparently when I departed MegaCorp two different pensions were in effect: a standard company pension; and a ‘supplemental’ pension. I’m honestly not sure why, but when I add up the two pensions, the total benefit was about $3K better per year than I had in my FIRE financial plan. I tried to plan retirement conservatively, but I’m not sure if this was a calculation mistake on my part, or a little future financial cushion I had put aside.
One hitch with the Supplemental Pension is that I have to immediately exercise the benefit at age 55. Apparently you can’t defer it to get a richer payout at a later age. Since it’s the smaller of the two pension plans (about 1/3rd of the total benefit), I guess that’s fine.
I will definitely choose to defer the Standard MegaCorp Pension – probably for another 10 years. It’s value over 30 years (adjusted for inflation), goes up about 10% if you wait. The latest I can defer it to is age 65, but if I wish, I can still jump into it at any time.
It will be terrific to start seeing MegaCorp checks being deposited into our household checking account next month. That will help pay for some breakfast cereal. That said, I have been thinking of myself as a young, ‘early retiree’ for the last 5 years … do I have to adjust to being bona fide ‘pensioner’.
Anyone forced to take part of their pension at 55, or as soon as you retired?
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