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Valued Contributor
Posts: 747
Registered: ‎03-09-2010

Re: Pension Beneficiaries...?

I retired not quite two years ago. I do not have a pension, but I do have a 403b. When I left my job, I had two choices: (1) to put someone on the account as a co-recipient, which would cut back on what I receive now) and (2) to name a beneficiary of money left after my death. I chose the second option. Since retiring, I developed two kinds of cancer. I also developed several other problems. I need my retirement money to cover drugs (I am in the donut hole now) and to help me continue to live more comfortably. If money is left when I die, it will go to beneficiaries, but I encourage you to put yourself first.
Respected Contributor
Posts: 2,937
Registered: ‎03-30-2010

Re: Pension Beneficiaries...?

DH and I thought we'd be set for retirement.  We don't live lavishly at all, don't go out for meals: vacations are few and far between.  Unfortunately, we are still working past normal retirement age.  Keep as much $$ as you possibly can because you may find you'll need every penny.

Respected Contributor
Posts: 3,883
Registered: ‎03-19-2010

Re: Pension Beneficiaries...?


@Chrystaltree wrote:

I can only speak for myself on this issue.  It might not be what you want to hear but that doesn't make it bashing.  The way I look at it is that if I retire at 66, I can reasonably expect to live another 25, perhaps 30 years.  Hubby and I have always worked hard, saved and prepared for retirement.  Elders today don't just live longer, they live healthier and active lives.  Our goal is to live well and to have the money to do the things we want to do.    So, taking a reduced benefit for any reason at all is simply not an option.  In particular, we would never in million years reduce our retirement income so that our adult children could collect something.  We aren't wealthy people, no one knows what the future will bring, so that would be a foolhardy thing to do.  We took care of our two adult children by paying their college tuition so they could go into well paying careers.  Which they both did.  One daughter is married and we paid a subtantial part of the wedding costs.  We put the same amount aside for our other daughter.  She's free to have it for a wedding someday or she can have it for the downpayment on a house or condo.  That's it!  They are on their own.  They have what it takes to build their lives.  We did well by them.  Now it's time for Mum and Dad to look out for each other.  What's ours...is ours.   


Chrystaltree, you and I think a like on this subject.  My DH and I have no children so may-be I never developed the thought process that  a lot of people with children do, ie., that they feel they need to leave an inheritance to their heirs.  If I had children, the only thing I would want to ensure is that they never had to contribute to my financial support in my old age.

 

When I was a young adult, I told my parents to enjoy their money.  I watched them go thru hardships while I was growing up and I felt they deserved to take life a little easier after retirement. Both my parents were gone before I was 40 and while I inherited some of their estate, any child will tell you that they would rather have their parents alive with them then inheritance in the bank.

Esteemed Contributor
Posts: 5,117
Registered: ‎03-30-2014

Re: Pension Beneficiaries...?

My actual advice would be to see a professional about this decision.

 

However, in the course of my career I had to look at a lot of pension plans and retiree health insurance plans and I hope you are aware that their funding is based on a number of assumptions that may or may not come true.  There is not a pile of cash sitting there with your name on it.  Most of your pension payouts have not even been set aside by the company.  So my personal opinion is to get all you can as fast as you can.

Honored Contributor
Posts: 10,440
Registered: ‎03-09-2010

Re: Pension Beneficiaries...?

My 2 cents both spouse and I had this type of option. We both decided our children would have other assets from us upon our death (which I will say was more than our parents ever did for us). My boys both have pretty good lives. We have 1 GD and if they need anything for her they can't afford we always pitch in (like extra daycare expense, summer camp, etc.) my other son is moving into his 1st home and we are helping to paying closing costs for them. I felt it would be better to help them them while alive because really that little bit they would receive each month wasn't that terrific.
Honored Contributor
Posts: 47,122
Registered: ‎03-10-2010

Re: Pension Beneficiaries...?

I was faced with this question when I retire as a state employee. I had no husband and one son. Call me selfish if you will but I figured, with no other income, I needed all I could get so elected not to have son as beneficiary. As it turned out he died unexpectedly a few years later so I made the right decision. I don't think a parent owes a child a lifetime income and should make him or herself as comfortable as possible in retirement. Of course if the child was incapable of supporting himself it might be a different story.
New Mexico☀️Land Of Enchantment
Trusted Contributor
Posts: 1,744
Registered: ‎03-10-2010

Re: Pension Beneficiaries...?

Thanks everyone for your advice! I have decided to not make my DS's my benificiaries. However, I don't think I will max out my monthly (state) pension but leave a small monthly amont to DH. Not sure yet as he has his own railroad pension and also some investments. Thanks again. I really appreciate the advice.

"Kindness is like snow ~It beautifies everything it covers"
-Kahlil Gibran
Honored Contributor
Posts: 25,929
Registered: ‎03-09-2010

Re: Pension Beneficiaries...?


@Still Raining wrote:

My actual advice would be to see a professional about this decision.

 

However, in the course of my career I had to look at a lot of pension plans and retiree health insurance plans and I hope you are aware that their funding is based on a number of assumptions that may or may not come true.  There is not a pile of cash sitting there with your name on it.  Most of your pension payouts have not even been set aside by the company.  So my personal opinion is to get all you can as fast as you can.


 

ITA - when we retired we took our pension funds as cash payouts, and added them to our IRA fund. We draw a monthly payout from that toward our living expenses. So many people we know are having their monthly pensions greatly reduced because congress just passed a law saying they could do that. ( You get who you vote for). Some friends of ours are losing 40 % of their monthly pension. 

Respected Contributor
Posts: 4,227
Registered: ‎09-05-2014

Re: Pension Beneficiaries...?

I just wanted to point out that the pension cuts approved by Congress relate to Multi-Employer Plans.  Those are the types of plans that unions have negotiated with various employers within one industry.  Some of these are in financial trouble so the benefit redutions will help the plans remain solvent.  The Teamsters for example have such a fund. 

 

If you work for a private company that has its own defined benefit plan it may be in good shape.  Check for the funded status of the plan.  Employers are required to give workers covered by the plan an annual statement of its status.

Honored Contributor
Posts: 47,122
Registered: ‎03-10-2010

Re: Pension Beneficiaries...?

[ Edited ]
"ITA - when we retired we took our pension funds as cash payouts, and added them to our IRA fund. We draw a monthly payout from that toward our living expenses. So many people we know are having their monthly pensions greatly reduced because congress just passed a law saying they could do that. ( You get who you vote for). Some friends of ours are losing 40 % of their monthly pension."


Unless you have reason to believe the plan under which you retire is not sound, this is usually not recommended. I could have withdrawn the money I had in my employers retirement fund. Almost no one does that. I've been retired since 1998, and have already been paid many thousands more than I had in the retirement fund.</B></B>
New Mexico☀️Land Of Enchantment