Page 1 of 2 12 LastLast
Results 1 to 10 of 18

Thread: Take out pension now?

  1. #1
    Senior Member lynnifer's Avatar
    Join Date
    Aug 2002
    Location
    Windsor ON Canada
    Posts
    19,320

    Take out pension now?

    I only made it halfway to a full pension .. but I've contributed about $40,000.

    I'm considering taking this out now for several reasons ...

    1) I need to pay off some debt I acquired ... I wasn't prepared to go off work when I did.
    2) I doubt I'll see 65 with my broken bladder, numerous wounds and while I'm currently infection-free, I doubt that will last.
    3) I went paralyzed at 12 and am now 41 .. might as well use it while I'm still able and no one to leave it to???
    4) If I reach 65, there's always Canada Pension Plan and Old Age Security. I'll own my condo then (still have about $100,000 in mortgage).
    5) Car is ten years old now .. though I don't use it much anymore, but seeing family requires 1-2hrs travel and medical 4hrs one way.

    Thoughts? I'd need a lawyer to get it out though.
    Roses are red. Tacos are enjoyable. Don't blame immigrants, because you're unemployable.

    T-11 Flaccid Paraplegic due to TM July 1985 @ age 12

  2. #2
    You are young and could slam right through 40k. I don't know about a broken bladder or Canadian health, but if you have cash in the bank instead of tied up in a pension trust they might want all of it in an emergency.
    I have had periodic paralysis all my life. I lost my ability to walk in 2011 beginning with a spinal block, which was used for a hip fracture caused by periodic paralysis.

  3. #3
    Senior Member
    Join Date
    Aug 2012
    Location
    Pennsylvania
    Posts
    1,813
    This is tough thinking. idea of use while can, certainly 1 thought. I was in hospital forever. When I got home I had a ton of deft because my mother put me in a nursing home. Not remember details, but my 401k was eaten up paying nursing home. Hospitals I was in allowed me to pay them monthly. Deal with hospital is the monthly payment has no interest against it, so I did not care how long it took to pay them. Nursing home did want their money. Those people I was able to negotiat3e a 50% reduction in what I owed them Rest I owed them was paid with 401k. I still wonder if that made sense. My uncle is always telling me I better start saving. I always respond "I may as well use it while I can." If I had $1 million, maybe I think different.

  4. #4
    Senior Member khmorgan's Avatar
    Join Date
    Jan 2008
    Location
    South Florida
    Posts
    366
    Quote Originally Posted by lynnifer View Post
    I only made it halfway to a full pension .. but I've contributed about $40,000.
    ...
    4) If I reach 65, there's always Canada Pension Plan and Old Age Security. I'll own my condo then (still have about $100,000 in mortgage).
    ...
    Thoughts? I'd need a lawyer to get it out though.
    I don't know Canadian law, but in the US the $40,000 would be taxed as regular income rates, so think you might only get $34,000 (15% x $40,000 = $6,000). Do you have an annuity option? Don't plan on dying before you are 65. You may not! I didn't, and I've been a SCI far longer than you.

    Are you certain that you will never work again?

    You may need a lawyer, but you certainly need a good financial planner who knows Canadian law.

    Good luck!

  5. #5
    Suspended Andy's Avatar
    Join Date
    Jun 2003
    Location
    Chicago IL
    Posts
    9,722
    I'd say if you are not planning on working again...might as well pay off whatever debt now and save the interest charges. Not sure how taxes are in Canada or if that was before or after tax contributed, but you know the drill, whichever way you end up with more $$ on hand.

  6. #6
    Senior Member
    Join Date
    Aug 2012
    Location
    Pennsylvania
    Posts
    1,813
    I would definitely pay off debt. I took approach pay off all the higher interest. If there is interest on debt and it is higher than what you achieve saving, you are actually going backward. I continually get credit card deal of extremely low interest. But in fine print get whacked with a % charge when transfer is executed. Now started getting deals where $0 charge for transfer. I have not done any. Am scared there is some charge I just cannot find in the fine print.

  7. #7
    I am not familiar with Canadian law, but in the US if you remove money from a retirement account before retirement age there is typically a penalty above the normal tax implications. You may be able to get that waived for health reasons but you should talk to an accountant. To be blunt you aren't going to retire on 40K, so if you can get it out without taking a burdensome tax hit I would do it and pay down debit.


    Quote Originally Posted by lynnifer View Post
    I only made it halfway to a full pension .. but I've contributed about $40,000.

    I'm considering taking this out now for several reasons ...

    1) I need to pay off some debt I acquired ... I wasn't prepared to go off work when I did.
    2) I doubt I'll see 65 with my broken bladder, numerous wounds and while I'm currently infection-free, I doubt that will last.
    3) I went paralyzed at 12 and am now 41 .. might as well use it while I'm still able and no one to leave it to???
    4) If I reach 65, there's always Canada Pension Plan and Old Age Security. I'll own my condo then (still have about $100,000 in mortgage).
    5) Car is ten years old now .. though I don't use it much anymore, but seeing family requires 1-2hrs travel and medical 4hrs one way.

    Thoughts? I'd need a lawyer to get it out though.

  8. #8
    The Internet
    Guest
    Do it.

    or don't.
    Last edited by The Internet; 06-07-2014 at 09:31 AM.

  9. #9
    If you can pay on your debt with your current income I would consider letting the compound interest do some compounding on the 40,000.00. You would need an investment that keeps up with and exceeds inflation without undue risk.

  10. #10
    Just to clarify: In US I believe an employer-provided "pension" cannot be rolled-over into one's personal account - the employer distributes monthly check. In addition, if you have an individual retirement account (IRA) set up at work in which you alone contribute via automatic deduction from each salary check, it can be rolled over into your own bank upon leaving employer, with no taxes assessed - your bank sets it up as an IRA putting it into CD's etc. If you remove any amount from this source it's taxable. At age 70 1/2 one must start withdrawing an amount.
    Definitely suggest you contact your bank to meet with a financial planner.

Similar Threads

  1. Replies: 15
    Last Post: 11-28-2009, 06:46 AM
  2. Should I take work pension early?
    By Uncle Peter in forum Work, School, & Money
    Replies: 7
    Last Post: 08-02-2008, 12:42 AM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •