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?
Image Credit: Pixabay
MrFireStation 
I’m a retired federal employee in the CSRS Offset system. I came in when they were transitioning from the old civil service system (golden handcuffs system with civil service pension) to the new FERS system (where you mainly paid into social security).
With CSRS Offset, I paid into the pension fund AND social security. You can retire at age 55 and are covered fully by the pension until age 62. At that time, they reduce your pension because you can apply for social security. You don’t HAVE to apply for social security, but your pension is reduced regardless.
Since I turn 62 this summer, I’m trying to decide whether to apply for social security (and take the permanent reduction) or wait a while for a higher social security benefit. Decisions… decisions.l
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It sounds like the CSRS Offset as a ‘bridge’ from 55 to 62. That’s a nice approach.
I always thought I would delay my pension and SSI as long as possible to get the max benefit, but I suppose the key input variable is your health. I never thought about it before my heart attack (Dec 2019), but maybe I should be!
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So true. Health will always be a wild card no matter how you prepare.
This site was the eye opener for me in terms of planning. I think we all “hope” to live to 90 or 95 when running a simulation but in reality there will be only a small percentage of us left then.. 😉 This site takes that into consideration when planning – will you even be around before you money runs out?
https://engaging-data.com/will-money-last-retire-early/
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Yes – that’s a great calculator, isn’t it? Death always wins in the end … and for most people comes earlier than expected! 😦
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Congrats! No pensions here, so happy for you! We have to do it the hard way (on our own!) 😉
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I honestly planned our FIRE escape without including the pension. I told my advisor once, “Oh, that will be just icing on the cake”. “No,” he said, “after 24 years there and at a corporate officer level, that will be more like an entree!” Lucky me – I had paid little attention to it and saved diligently anyway.
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Congratulations on the pension and the surprise cushion! They can call you a pensioner, an early retiree, or simply retired…as long as they don’t call you “into work”, ha! Take care.
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I felt like a dinosaur when I left that MegaCorp 9 years ago. I’m sure there is no risk they’ll call me again for anything!
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