Do You Have Old Pention Plans?

This is for my followers who are pushing the 55 year old mark or have pasted it.  Sorry to say, but yes some of us are getting older and as we age so do our financial needs and our financial planning.  So let's talk about those things today.

Did you know that the average length of stay with each employer is about 5 years.  Now remember that is average.  How many of you worked some place from the time you were in high school and maybe only worked there a month.  You may have worked at your current job 15 years.  But you have to average out all your various jobs from the first one to the last one even if you only worked one day. 

Thus we do change jobs on the average of about every 5 years, many of us pushing age 55 or older are facing retirement in the fairly near future and we need to be planning for that day.  Some like me may retire early.  Some may never quit working or retire.  But I have spoken about that in a previous blog you should read. 

It is important that you know with each of your employers what your vested date is if you have a pension plan or 401K/403B matching plan with the company.

Example: I worked for Blue Cross and Blue Shield of Iowa for 6 years.  I became a vested employee in their pension after 5 years and was too stupid to know it.  Okay I have learned a lot since 1993 when I left their employment.  Thus I am a retiree of their pension plan.  One day out of the blue I got a letter in the mail about 10 years ago at my current address.  BCBS of Iowa had finally found me after literally about 12 moves and 3 or 4 different states.  In this letter I was informed I had pension money as a retiree!  It also gave me a web address to go see the amount and some information as to how it was invested within the chosen annuity.  It informed me my choices as to how the money could be paid out to me.  This is the tricky part.  When do you take your pension money.  Especially on small pension payouts. 

The amount of money was about $15,000.00 for me if I take a payout of my old pension plan with Blue Cross/Blue Shield.  If I waited until I was 65, of course the amount would be a little more for a lump sum payout or for a monthly payout. 

So what do you do?  For MOST old pension plans like I have described here, which is a true example the best thing to do is take the decreased payout at age 55 years old, which I will be doing.  Why?  The answer is simple.  It is your money at age 55 and you can invest it more wisely and make more money than you can in any annuity they may have it invested in.  Would you rather get 2% per year or 10% to 30% per year?  I have many investments and mutual funds making 10% to 30% per year.  And you financial advisor should be able to find those for you too.  The answer is simple then...more money in your pocket every year is only to your advantage.

So don't be stupid like I was, not knowing I had money out there until they contacted me over a decade later when they finally found me.  You need to be checking with old employers that you worked for three years or longer.  You might find a nice surprise like I did.

Gus S.


Disclaimer: Make sure to review any information found on this blog site with your personal financial advisor before making any decisions. I am providing general information and not financial advise. I am not a licensed stockbroker or financial advisor.