Understanding and Optimizing Your Pension Benefits

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In this episode of Blue Collar Wealth presented by Stone House®, join Bob Brown, CFP® as he talks about one of the most important parts of your retirement plan: your pension.
A pension plan is an employee benefit that commits your employer to regularly contribute to a pool of money set aside for your retirement. There are two main types: defined-benefit plans, which guarantee a specific monthly payment for life after retirement, and defined-contribution plans, where you and often your employer contribute to your pension account, but the final benefit depends on investment performance.
Your pension plays a significant role in retirement income planning. Knowing your monthly pension income helps you budget effectively and impacts decisions like when to claim Social Security benefits. Defined-benefit plans provide a predictable income stream, while defined-contribution plans require more careful planning due to their variable outcomes.
Let’s talk about strategies for optimizing your pension benefits:
Maximize contributions
Understand vesting
Lump-sum vs. Annuity
Important considerations:
Tax implications of pension income
Maximizing social security alongside your pension
Understanding and optimizing your pension benefits is essential for a secure retirement. At Stone House, we specialize in helping our clients build financial security and that priceless peace of mind that allows for greater happiness in retirement. Request an appointment with a Stone House Advisor to get started.   
Thanks for watching!  
We’ll be back next Wednesday with a new episode, so stay tuned. 
Timestamps:
🕒 00:00 Intro
🕒 00:35 Why is a pension important?
🕒01:35 What is a pension?
🕒01:52 Defined-benefit plan
🕒02:13 Defined-contribution plan
🕒02:25 Impact on income planning
🕒04:52 Strategies for optimizing pension benefits
🕒05:02 Maximize contributions
🕒06:50 Understanding vesting
🕒07:47 Lump Sum vs. annuity
🕒09:22 Tax Implications of pension income
🕒11:14 Maximizing Social Security alongside your pension
🕒11:35 Conclusion
Learn more at www.stonehouseretire.com/blue...
Disclosures:
Registration with the Securities and Exchange Commission does not imply that Stone House or its representatives have achieved a certain level of skill, certification or training or that the SEC approves of Stone House or its services.

Опубликовано:

7 авг 2024

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Комментарии : 15

@TM_Stone Месяц назад

Thanks for the video, very informative. I'm one of the fortunate few that have two pensions. One is from 21 yrs of military service and the other is a defined benefit plan pension from the corporate world (rarity these days). I was laid off after 17 years with them a few weeks ago with 8 months severance but was hoping for it since I planned on retiring early next year. So now I can say I retired twice at the age of 56. Not too bad.

@Barbara-jn2gw Месяц назад

thank you for your service ! 🤍

@mapsandglobespro Месяц назад

After retiring with 3 pensions, military, local government, and 31 years with a telecommunications cooperative. What I wished I had back when I started was a Roth 401K/IRA. Defined contributions plans are partnerships with the IRS. Now I'm busy doing Roth conversions. Plus, there is a rule of 55 where you can retire and draw from your 401K without the 10% early withdrawal penalty. This only applies to the 401K though! I did it, and your distributions have to be of equal amounts. Bob is right though, the earlier you become financially literate, the better you understand your investment options.

@youarehere1251 27 дней назад

Roth - You will end up with a medium pizza Traditional - You will end up with a large pizza Uncle Sam will get a slice

@BlueLineGroovy 4 дня назад

I have a defined pension available. I can start it right away or, as usual, if I wait there will be more, per month. I’m trying to figure out the calculator .. where would the amounts even out as I age (?). It’s my decision , I know, but it can be like reading a crystal ball. I appreciate your information via this video.

@caregiver_life Месяц назад

For every almost every rule there's an exception, especially when it comes to taxes! I don't often see videos about pensions since they are so rare these days. There are a lot of things to consider, I don't know if it's common for defined benefit pensions but mine has an early payout penalty (% reduction per year before 65), and the lump sum would be a lot smaller right now since interest rates are higher.

@LtGp3Eng2 Месяц назад

It's nice to see someone talking about planning with pensions. Many folks with DB pensions will be subject to the WEP. Perhaps you could cover that topic since it can be a bit tough to factor in. Thanks.

@stevelopez372 12 дней назад

Regarding WEP. I had 40 SS credits minimum to receive SS at 62. Which would amount to $675.00 per month. I spent 30 yrs. In Public Service in SoCal. Calpers system. I knew upfront WEP would apply since city made no contributions to SS. Also knowing my pension formula. I decided to move up the Career ladder a few rungs. From a five figure salary to a six figure salary, also to maximize the pension formula to 75% I needed to work a full 30 yrs. This move made the $325.00 WEP reduction very easy to take. And I was able to retire at age 58. Raising four kids made it difficult to keep a savings plan. So this worked for me. It may be different for you. God Bless.

@gregcareaga9981 Месяц назад

Lump sum is usually a bad idea. The only reliable winner is the financial planner who charges based on the size of the assets under management.

@SpookyEng1 Месяц назад

Wrong

@SpookyEng1 Месяц назад

Wrong

@chetanjilhewar1669 Месяц назад

Interesting but it is based on circumstances. Having a lump sum would be better depending on the circumstances.

@dantheman6607 Месяц назад

@@SpookyEng1no he’s not think about the poor saps that took the lump sum in 2022 and saw it melt down 22%. There’s a simple 6% rule to see which is better.

@dantheman6607 Месяц назад

@@SpookyEng1if you already have a large 401k or IRA do not take the lump sum take the pension