Here is what I think you should do:

Annuitize $300,000 of your 401(k). Put $100,000 is each of the
following:

Joint life immediate fixed annuity (would apy approx $8,000 per year
for life)

Joint life immediate variable annuity- 3% AIR (an excellent hedge
against inflation)

Joint life immediate variable annuity- 5% AIR (to provide a little more
guaranteed income during the early years of retirement)

Leave about $100,000 in your 401(k)

Checkforspam wrote:
- quote -

In answer to some of the questions:

The pension is about $55K and is a governmental pension. It comes with a min.
increase of 2.5% to a max increase of 6% based on the CPI. The medical,
dental, and prescription drugs are also fully paid for with a small co-pay.

The shortfall comes from living good. We don't want to lower our standard of
living below what it is. I figure we need about $67K in today's dollars to meet
all our expenses. That's about $12K less than what the pension provides.

I'll be turning 62 and can collect that in SS or we can take that from the
$400K in our deferred accounts. When my wife turns 62 we will have an
additional SS check coming in, or we can wait until she reaches 65.

The problem is how do we make up the current shortfall?

Taking SS payments is probably the answer, But why the 12k shortfall should
be figured out. Unless the plan sponsor is the Federal Government, I
wouldn't be 100% comfortable with the guaranteed paid medical. Ask people
from Polaroid, Verizon, Honeywell et al about paid medical.

Perhaps they would be better off liquidating the real estate into another
financial asset.

"Elizabeth Richardson" <erichktn[at]worldnet.att.net> wrote in message
news:YqRgc.54032$K_.1215162[at]bgtnsc05-news.ops.worldnet.att.net...
- quote -

Here is my ranking:

1) SS Start SS when you are eligible. The payback is long if you
defer. To be eligible you can't be earning much and must be at least
62.5 years old.

2) Draw down on your 401ks. That's what they are for. Check on age
limitations so you don't incur a penalty.

3) Don't blame your Roth for bad investments. You can't beat tax-free
for you and your beneficiaries! Fix it and keep it.

Frank

checkforspam[at]aol.com (Checkforspam) wrote in message news:<20040418213721.18547.00000038[at]mb-m25.aol.com> ...
- quote -

- quote -

In this situation I don't think it unreasonable. There is a pension indexed
for inflation with medical insurance included in this pension benefit. They
can expect an increase in income through social security, also indexed for
inflation. The couple has tax-deferred savings which is more than adequate
for supplementing these other sources. They have done a good job of
constructing the 3-legged stool.

My first reaction to original poster's questions was that he should start
taking social security. The social security administration will tell you
that this is a lifetime reduction in your benefit amount and that you should
put off starting benefits as long as possible. You can find out what the
difference is and do the math. I looked at it for myself and figured it
would take 11 years of the higher benefit to equal the 3 years of starting
at age 62. As you have other income which you will be required to start
drawing on in 8 years, I would opt for the early SS. However, if you're not
happy with the IRA, and it is the small amount to last only a year, I would
withdraw that first, putting off the SS one additional year. It won't make
much difference in the SS check, but you can feel you've "hedged" your bets
somewhat.

Elizabeth Richardson

On Mon, 19 Apr 2004 06:43:15 CST, "BMS" <mcfarland[at]yahoo.com> wrote:

- quote -

Important question. Here's something else.

Absent current medical problems not disclosed, husband/wife in late
50s/early 60s have life expectancy of about 30 years.

Now think back 30 years. Gas was $.30/gallon, my salary was $11,000,
my house cost $29,500 - suffice to say we've seen extraordinary
inflation. Besides that, interest rates have moved between 15%-1%,
real estate and health care costs have soared, stock booms and busts,
major income/estate tax changes and Social Security virtually
revamped.

And we want to start the next 30 years with tight cash flow expected
using *current* lifestyle costs?

-HW "Skip" Weldon
Columbia, SC

What are your current expenses and your total income and liquid assets?

Where does the 12 k shortfall result from?


"Checkforspam" <checkforspam[at]aol.com> wrote in message
news:20040418213721.18547.00000038[at]mb-m25.aol.com...
- quote -

We need an additional $12K in before tax funds to make ends meet. We have
several choices:

1.Start to take SS early, I will be 62 this year, wife will get an additional
$14K in another 7 years.
2.Take the whole $12K from a small Roth that hasn't done well, and face the
same dilemma next year.
3.Start to withdraw from our 401K's. They total about $400K, so a $12K annual
draw would not be overly excessive.

We have a good pension with a 3% min. annual increase, and medical is paid. We
have emergency cash and also own some prime undeveloped land which we are not
willing to sell at this time. A hard look at our budget says $12K more would
make things comfortable. The question is from where should we take it?

Thanks for your thoughts and suggestions.