A big decision

So you know you are officially old when you are making calls to financial advisors to discuss retirement which is what I did yesterday.  With my job, one of the benefits is a retirement plan.  That benefit used to be strictly a pension plan for all employees.  Well sometime in the early 2000’s they made an investment plan as an option where instead of a defined monthly benefit from the point you retire until you fade away, you have money thrown into a retirement account that you have full control over.  When you retire you them have this big chunk of change to do with what you want.

So when this option became available all employees had to decide if they wanted to stay in the pension plan or move over to the investment plan.  At that point I wasn’t all that sure if I would be at my job until retirement, plus I liked the idea of having full control over that money if I did have a change of careers.  When you are in a pension plan you get that benefit at retirement age and that’s that.  So at that time I decided to move into the investment plan with the understanding that I had one opportunity to “buy” back into the pension plan during my career.

So turning 50 was a good reason to start reevaluating my retirement options which at this point are unbelievably only about a decade away.  I called into the Florida Retirement System and talked to an advisor that was very helpful in explaining my options and how it all works.  We ran a calculator that estimated my retirement income if I went with a pension versus the investment plan.  The numbers it returned were shocking to me.  The monthly benefit with the pension was roughly 35% higher than I would expect with the investment plan if I figured on getting a moderate return on my money.

The other positive news was I had more than enough money in my investment plan to cover the buy in cost to transfer back to a pension plan.  I actually would have a nice chunk of change left over in that account to go along with the larger chunk sitting in the 457B account I also contribute to.  So the conversation made it pretty clear to me that at this point in my career, with more than 18 years under my belt, switching over to the pension plan makes a lot of sense, assuming I manage to stick around for awhile after retirement age.

I am hoping the market rebounds a bit so I can initiate the switch with my investment plan as fat as it can be.  It seems surreal that I am at the point in life where I have to even give these things serious consideration.  It seems like only yesterday that my biggest concern was what flavor Pop Tarts I was going to eat while I watched Saturday morning cartoons.