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I was relieved of my job of 11 years and received an OMERS package in the mail with the pension options available to me. I am struggling with the decision and looking for feedback.
I am 52, married and have a child. Due to COVID I have no idea when I will be able to return to work, what I will be doing or where.
The options available to me currently are:
Option 1- The plan indicates an annual (deferred) lifetime pension of 22K starting at 65.
Option 2- The CV amount is approx. $400,000.00- $200,000 to be allocated to a LIRA and 200,000 in cash (taxable).

The CV amount seems very high and I feel hard pressed not to take it. I look at the amount I have contributed and consider that if I was to take the CV amount, I "earned" more on my investment/money that I could have ever expected... and if managed well could be even better. Do you agree? The lifetime pension amount seems paltry by comparison (I know it will be inflation adjusted). I would appreciate your thoughts. Thanks.
 

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Don't forget the taxes on the taxable amount. If that was your whole income for 2021, your taxes would be close to 70k. So in reality, you're only getting 330k, not 400.

Personally, I feel like 22k inflation adjusted from age 65 onwards would lead to a very comfortable retirement. Let's say you get about 10k in OAS and another 10k from CPP - you'll have 42k/year in inflation adjusted income. And it's guaranteed, it doesn't matter how the stock market does.

As long as you have enough money set aside that's not your pension, or a way to make money, so you can make it to 65 when your pension will start, I would take the pension. I am conservative and I love the idea of a sure thing.

Of course if you actually need the money to live between now and age 65, that's another story, and then you should likely take the CV.
 

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... I look at the amount I have contributed and consider that if I was to take the CV amount, I "earned" more on my investment/money that I could have ever expected ...
If you are comparing what you contributed and are taking the CV of $400K as growth, you are missing several factors.

One factor is that the employer was contributing, usually as much as you are.
Another factor is that the formula to figure out what the CV as a lump sum to replace a lifetime pension looks at things like mortality tables, interest rates etc.


... and if managed well could be even better. Do you agree?
For a select few ... there are many more who thought this way, took the CV and discovered what they thought was easy didn't work out for them.
It can be hard to make the right move when the markets are down a lot.

Keep in mind too that should the investments in the plan not do well, OMERS has to top it up. If you make a mistake with the investments, too bad so sad.


... The lifetime pension amount seems paltry by comparison (I know it will be inflation adjusted) ...
Or you could keep the pension and take more risks with your investments.


Cheers
 

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Taking a shot on the flip side here ... would ask about longevity in OP's family. If it's a concern, then the CV might be a better option, considering that interest is all time low (ie. CV calculated at all time max.). There would be no concern of OMER going broke so the annuity is always there ... but might want to know if there's a survivor option there. Sharing my nickel.
 

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I took the locked in and cash portion last year. Great timing. Dumped it all in VGRO and I’m up 25%. CV are unusually high recently due to low interest rates. I’m 6 years younger than you. I’m hoping I can double or triple my amount in 20 years. There are also estate considerations to be had. Taking the money out from the pension seemed right for me.
 

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Taking the pension also let’s you play a little. I put $25k in pot etf and Disney. Up 60% and 25% respectively. If you get “lucky”...a couple of small $10,000 gambles, could turn into much more. It also gives me something to do. If I didn’t take My pension, I probably would never be on CMF. ;)
 

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^ Now we can't get you off CMF knowing you were an ex-bank employee. ;)

If you get “lucky”...a couple of small $10,000 gambles, could turn into much more.
... still selling? :censored:
 

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^ Now we can't get you off CMF knowing you were an ex-bank employee. ;)

... still selling? :censored:
“Advising”.......let’s me sleep at night as I rape and pillage retirement accounts for Canadians through my overly aggressive MERs and bonuses! Mwah, ha ha ha !
 

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“Advising”.......let’s me sleep at night as I rape and pillage retirement accounts for Canadians through my overly aggressive MERs and bonuses! Mwah, ha ha ha !
... you would.
 

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I don’t know who hurt you...
... just say it's your bank buddies (not TD though so you're safe) ... literally "robbed/pillaged (aka lifted)" your bank account. And some. Happy to know/reminded of now?
 

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...yah, you can say a couple of them (from the banks and independent ones) I interviewed do look like that. There was 1 exception (from a bank believe it or not), only problem they relieved her when she got sick/disabled.
 
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