Definitely between #2 and #3.
Dad died at age 64 and 6 months.
He had retired after 20 years in the military, so Mom has Tricare and it is FABULOUS compared to private insurance.
He had NOT stated his 2nd career's pension plan (was planning to wait until age 65). The company had declared bankruptcy and the Pension Guarantee Fund took over, when Dad was 62yo, but he was there more than 25 years.
That pension offered:
For participant only:
a. one time cash payout
b. guaranteed amount for 5 yrs or 10 yrs
c. lifetime annuity (no spousal option chosen)
d. annuity for life and for spouse:
Participant takes a lower amount and upon death, spouse receives 50% of the lifetime annuity amount upon participant's death, for spouse's remaining lifetime.
The spouse must sign off on the plan chosen.
IF the plan option had been chosen before death, that choice was made, even if the participant had not started the pension.
IF your husband wants to wait to start his 2nd career pension, then read the plan carefully before deciding if your husband should choose an election and lock it in. HR departments tend to try to get that option chosen when the employee leaves the company.
The pension plan management was SHOCKED when they found out that Dad hadn't chosen an election and signed the form when the company was dissolved. Mom would have received nothing under the terms if he and she had chosen elections a through c.
Another consideration:
I am currently looking at 3 pensions with elections (62yo). 2 of the 3 sent me options to start early, due to changes in pension plan funding laws at the end of Pres. Obama's term and the laws took effect within the 1st 6 months of Pres. Trump's term.
At that time, i chose to leave the money in the pensions and not start any elections.
I should have read the terms more carefully.
2 of the plans are guaranteed fixed monthly annuity amounts. I can choose a cash payout onetime amount or a reduced amount (onetime or monthly annuity) if i start earlier than age 65yo.
1 of those 2 plans actually WILL increase the amount if i choose to wait until i am older, up to age 70yo to start. The other plan will not give me any more if i start later and will NOT give any payments missed if i do not file to start at age 65 yo, at least 90 days in advance of the 1st full month after i turn 65yo.
Note: when i left the companies, after qualifying for the pensions, the plans give a monthly annuity $ amount ,that is locked in at an age 65 amount.
The plan that gave me an early payout option (either monthly annuity or onetime amount) offered much less per month and the onetime amount could not be invested "safely" to yield the guaranteed fixed monthly amount at age 65yo. I took the offers to my IRA administrator and he couldn't find a way to yield close to that amount for the onetime amount and the monthly offer was too low to take.
The 3rd plan is a cash balance pension. The company put $ into the pension every year that i worked there and the interest on those funds has been credited each year. With the interest rates so low, the annuity amounts are drastically different than if i had started the plan 3 and half years ago.
IF i had started at age 58 yo,(locked it in then), i would actually be receiving the same amount now than if i start the fixed annuity today. So, I've lost 3 and a half years of the annuity amount. The projection then was that i would receive 57% more at age 65, so i elected to wait. If i wait the 3 years now, it is only 6.4% more.
The cash balance has increased by the annual interest each year.
Making things more "interesting".
In August, the company sent a letter that they were requesting a change to existing plans, that if the annuity company dissolved the annuity, (as in, LOST the $ , as happened most notably with a German investment firm last year and affected many state/large pension plans), the employer will NOT be responsible for continuing to pay those annuities!
The company is also requesting that if the company pension plans do NOT meet the funding requirements at the end of the fiscal year, that they not be required to add that funding to the pension funds, due to the current economic conditions.
IF i am reading the Economic Stimulus bill correctly, they may have at least partial approval.
Last week, after researching the company, i decided to request the cash balance to be transfered to my IRA.
Sorry to be so long, but the 3rd pension has me worried.
hth
