Had to come to the knowledgeable that is Clutch BBS. My dad was exactly 1 year away from retirement and he finds out today that the plant he works at is closing next month. The company told him he can move to another location and continue working, but he told me that's out of the question. He was also told the pension that was suppose to start in December would start in June. Does he still get the full pension even though it's 6 months before his retirement date? Can he still work another job from next month until June? Or does that disqualify his pension? How does insurance work during his pension? Does he have to go through Cobra? Sorry for all the questions. My dad isn't taking it that hard since he was going to retire end of next year, but for it to happen now, kind of came out of nowhere.
Anything anyone posts here would be speculation. You dad needs to talk to the HR folks at his company to get those questions accurately answered.
I would concur with this advice, BUT... working elsewhere will not effect his pension. lots of greeters at WalMart. My father-in-law was retired from the railroad and worked in that industry as a consultant training young engineers. He probably "could" continue his insurance through COBRA-- a federally-mandated program for larger employers. If he has good health, he could buy health insurance in the market and keep it for just the year. He has some 60 days to elect COBRA and make up back premiums to keep the insurance coverage in continuous effect.
Probably won't get full pension if he retires early, but that is speculation as previously noted. If it's only for <1yr, he should consider living in a spartan apartment at the other work locale and ride the wave until full retirement, IMO.
He told me yesterday in June that his pension will kick in (more details to come next month when they're closing). And giddyup, you're right.....he can work while getting his pension. But if he doesn't want to, he can receive his pension and start taking out of his 401K since he's 62. Insurance is the problem. According to him, he said COBRA is $1,000+ a month, which is killer! Is there another option other than COBRA? Right now, he's lucky because my mom is still working and he was going to join under her insurance, but who knows how long that will last?
More important concern is that with the plant closings, whats the company's ability to continue to pay that pension? A pension is not a 401k in which its in your name, but a company obligation that can potentially be wiped away during a bankruptcy. Many people are taking the lump-sum options and determining if working a little longer may make this more feasible. Sounds like he needs a good financial advisor more than comments on a Message Board.
If he has already satisfied the plan document's year of service definition for the purpose of benefit accruals, then he should be ok with a start date 6 months early, if not...then his beneft may be less than his normal retirement benefit (for example if the pension formula is calculated using plan years of service...6 months might not qualify if he doesn't work 500 or 1000 hours). In any event, he will receive the actuarial equivalence of his accrued benefit, even if payments begin 6 months early. He can work another job. Join his wife's insurance until medicare kicks in
$1000 a month is about average for health insurance for a 62 year old. The work after retirement rules apply to social security benefits. http://www.ssa.gov/OACT/COLA/rtea.html If your dad talked to a financial planner he would tell him to suck it up, move and work until he is 65.
I am a licensed L&H agent. I don't do business in Texas; I've met your dad though at the SmeggySmeg party! I can help you find someone local if you like. Believe it or not, there are boards like this for insurance agents and I've "met" some of the Texans there! Let me know if you want that kind of help...
This. I work for a retirement plan company, and that's spot on what I was going to say. The devil's always in the details of the plan document.
