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IRA to Pension Plan? (1 Viewer)

Steeler

Footballguy
My wife has been at her job for a while now but when she started we assumed it was going to be temporary.  When she started she was offered a pension or a 401K - because we thought she wouldn't be there long she opted for the 401K but now she is considered changing to the pension.  If she changes, she will have to "buy-in" because she hasn't contributed as much to the 401K as she would have if she was in the pension from the beginning.

I don't want to get into specific amounts, but the buyin amount is 3% of our total retirement nest egg (IRAs, Roths, etc. -- not counting cash/liquid accounts and not including our home equity).  Both of her parents lived into their 80s and if she makes it to that age the monthly pension checks will crush this 3% amount (including any reasonable growth this 3% could make in the 401K).

It seems like a no-brainer to convert 3% of our nest egg into a monthly payment during retirement.  It's a government job so there is very little risk of a default/company closing/etc.  The only thing I can think of is to determine if her SS payments would be affected.  What else do we need to consider before changing to this pension option?

 
What are the payment options if she passes before you?  Options typically may be payments stop on her death, payments continue at 100% to you or 50% to you. The decision is  usually made when you start collecting the pension payments.  The payments will usually be more for no survivorship and less for the 100% or 50% options.  Do you have an option to take a lump sump payment?

 
Pretty sure her SS will be affected. It will be a reduced amount provided she has her 40 quarters paid. 

 
:blackdot:  I have a question thats related to the OP's but I dont want to hijack so Ill wait to ask my question. 

 
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