I can start drawing a pension of $460 per month from a former aerospace co employer. If I wait five years, it will be $790 per month. I'm currently working for a different aerospace-defense co that also has a pension plan, which I likely won't start to draw for six more years. I'm tempted to start on the first one...

Thoughts?

Well, you'll make it up in 5.5 years, if you wait.

Also relevant is your total income for tax purposes, if the 460 is coming in a higher bracket since you are working, you'll make it up even faster if you wait.

If the company might not stay solvent, you might want to take it sooner, bird in the hand and all that.

Finally, how long do you think you have? :)

Mrbill - I've done the math and considered the tax implications. Health is good, bicycling to work 40 miles per week.

The question is more about TSHTF (or bird in the hand and all that).

Take it now. What do you really hope to gain by coming out ahead by 3k a year 10 years down the road?

partly depends on what you plan to do with the money, and the health of the pension plan.

I turned 66, which is full draw on SSI. If I wait till I am 70 to draw the SSI, it goes up 8% for every year I do not draw. I don't need the money, and have no debts to pay off.

Where would I put the money today? Where can I put it today, that will get me an 8% payback, and keep paying it?

I'm healthy, and grandparents on both sides lived to late 90's except for my maternal grandmother who died in her 80's.

My payback is 7 + years.

If you use it to pay off all debts or reduce debt dramatically, becoming debt free is a worthy goal.

But, if the pension plan is healthy, and you are already debt free - Personally, I would tend to let it sit and draw the higher amount.

Swing - Thanks for the resply. My concern is that all pension plans will face dramatic reductions do to a coming credit collapse as widely discussed here.

Clint wrote..

My concern is that all pension plans will face dramatic reductions do to a coming credit collapse

yep, it is an issue. However, some plans are better funded than others - plus, presumably you would get a larger slice of the smaller pie if you are drawing at a higher level when payouts are reduced.

I face a similar situation with SSI. I expect it at some point in the future to become income based, and did some research as to what they did in Canada. Basically, in Canada - if you have more than 50k income, your benefits are reduced by that income.

I anticipate having more income than that, so if that or something like that happens it might well wipe out my SSI benefits.

You are damned if you do, and damned if you don't.

However, I think they likely will run the printing presses till collapse, and who knows how things will wind up, or how long that will take.

Probably the biggest factor in my decision to not draw benefits is that I have no clue as to what to do with the money to actually grow it - and I already am looking at more income than I can readily invest and simply will park it in FDIC gauranteed accounts.

There really is no good thing to do with it at this time, at least that I am aware of.

said another way

You are not betting against breakup of the pension fund - you are betting against breakup of the pension fund before the end of payback period.

The above versus what can you do with the money today?

Cash in hand to take advantge of the coming asset deflation. Spread around several solid banks and CUs. Play with short ETFs. SDOW is up ~20% in May.