At what age can you claim your retirement?

I just realized that I have never posted about a valuable lesson. We happened to have a retirement question and contacted a previous HR third-party provider. It turned out that the wife was able to start claiming a retirement immediately. She had just turned 58 and according to the plan she was in she was now eligible.

That was five years ago and she is still receiving a small stipend. She only lost a month of benefits, but it could have been worse. When you retire the SSA is required to provide you with a list of pensions you have on your record. In my wife's case she would have lost nine years of benefits upon discovering this at 67!

A checkup may be due on your benefits. You're older than you think. Check at what age you qualify for benefits, with any and all past employers. Once this money day passes you can't go back and reclaim it, you may only claim it going forward.

Even if the plan went belly up, you could possibly have an annuity! Check: PBGC.

If your old employer has been merged with another company, you could be a member of their retirement plan.

Anybody that has experienced this or just knows of unclaimed pension monies please post!

What's a pension?

What is retirement?

Most plans annuitize the amount you receive based on when you start taking your pension. If I started taking Pension A when I am 65, I would get X dollar per month. If I start taking it now, I would get 1/4x per month, making it much more advantageous to wait.

BitemeIamtoxic said:   I just realized that I have never posted about a valuable lesson. We happened to have a retirement question and contacted a previous HR third-party provider. It turned out that the wife was able to start claiming a retirement immediately. She had just turned 58 and according to the plan she was in she was now eligible.

That was five years ago and she is still receiving a small stipend. She only lost a month of benefits, but it could have been worse. When you retire the SSA is required to provide you with a list of pensions you have on your record. In my wife's case she would have lost nine years of benefits upon discovering this at 67!

A checkup may be due on your benefits. You're older than you think. Check at what age you qualify for benefits, with any and all past employers. Once this money day passes you can't go back and reclaim it, you may only claim it going forward.

Even if the plan went belly up, you could possibly have an annuity! Check: PBGC.

If your old employer has been merged with another company, you could be a member of their retirement plan.

Anybody that has experienced this or just knows of unclaimed pension monies please post!

I thought when I died, the Government will dig a ditch and I'll be dumped into it via Caterpillar.

evanm said:   Most plans annuitize the amount you receive based on when you start taking your pension. If I started taking Pension A when I am 65, I would get X dollar per month. If I start taking it now, I would get 1/4x per month, making it much more advantageous to wait.

Agree. As far as i know, all pensions work this way. Also, the number of years of employment one has with that employer affects if he/she can start withdraw earlier or not (at the reduced amount). For instance, some companies require you to have a minimum of 10 yrs of service to have the option of taking the pension earlier (for instance, at age of 55 instead of the normal 65).

OmarLittle666 said:   I thought when I died, the Government will dig a ditch and I'll be dumped into it via Caterpillar.Don't be silly, the gub'mint wouldn't use machinery made in the US for the job.

Yeah, the longer you wait for Social Security, the more of a monthly income you get. The bad news is, SSA calculates your payments based on average longevity tables, so that the average payout in the system is the same.

More bad news... The more money you get in retirement, the more likely you have to include SSA payments in your income for tax purposes.

Some good news... In SSA, you can retire and defer payments so that you get a larger payment later. But wait! When you do this, your spouse can claim benefits from your retirement. (Google ssa spouse deferred benefits etc.)

Some bad news... There was a loophole that allowed you to take SSA benefits at age 62 (or any age after 62) and pay them back up to age 70 to restart payments at a higher (age 70) level. Alas, this strategy is no longer available and when it was discontinued folks got locked into there age 62 payments. (Aside: this is a variation of the Monty Hall problem, but apparently the gov't hired someone that understood this and phased it out.)

I know that people who retire before they are 59 (and, I believe, over 55) can start withdrawing from pensions and 401K's without penalty.

As a matter of fact, people of any age can start withdrawing from IRA's without penalty if they only withdraw what they would be permitted to based on actuarial tables.

cantstop said:   
More bad news... The more money you get in retirement, the more likely you have to include SSA payments in your income for tax purposes.
I'd say that having enough residual retirement income to make social security payments taxable is a good problem to have...

any time you have few millions lying around!

I can claim as early as 50 (although the payout would likely be small). I qualify for retiree healthcare at 55 so I consider that my true minimum retirement age. This is in the private sector no less so there are a few pensions left. While my pension is certainly very nice to have the bulk of my retirement income will be from my wife and my savings. Based on pretty conservative estimates I expect to hit the number I feel I need by 55-58 so right now that is my likely retirement age.

Substantially Equal Periodic Payments

The substantially equal periodic payment exception is available to anyone with a 401k plan, regardless of age, which makes it an attractive escape hatch. It is called a Section 72(t) distribution. In a 72(t) withdrawal, the distributions must be "substantially equal" payments based upon your life expectancy. Once the distributions begin, they must continue for a period of five years or until you reach age 59½, which ever is longest. The full rules and life expectancy tables can be found in IRS Publication 590. This option generally give you the least retirement pay out available.