Retiree Insurance

When I retired from BMS I took the lump sum. CDs paid between 4 & 5%, so it seemed reasonable. With today's current yields, I am not sure I did the right thing. I do not know what is right now.

I had hoped to travel when I retired, but the health insurance increases have put a lid on that. I suppose I should appreciate what I have, but I am a little disappointed. Good luck to all of you!

 

I'm not sure you are correct on the discontinuation of lump sums after 2012, have to check into that. If true, you will see many people retire in 2012.

 

Well, I think it depends on if you want to and are committed to carefully and consistently managing the lump sum, dealing with tax issues from capital gains/losses, etc. If you think you may live a long time, perhaps to 90 or so, it is hard to beat the annuity when you consider how much the total payout would be.

Also, when I talked to Fidelity about taking my lump sum and rolling it over into a qualified retirement plan, they said they only wanted to use 50% of it to generate an income stream. That amounted to very little monthly income to live on, and I'd have to find some kind of job to add to it in order to make it.

And, yes, the retiree insurance premiums that BMS is now charging also make it virtually impossible to retire early, unless you can be on your spouse's insurance. In my case, my spouse's insurance is not that great, and the premiums are kind of high if she carries any dependents on it.

 

Taking the Bms annuity is only 1 option. You might check out the fact that annuities are from ins companies and are regulated by states. In case of a ins co failure, your annuit is ONLY guaranteed to $100k per ins company. There are many ways to manage a lump sum that offer you better protection than an all in 1 annuity.

 

Why would anyone try to jump thru hoops to move up as a rep when this company offers no retirement and the worst health insurance benefits in the induastry. GO TO ANOTHER COMPANY AND INVEST THAT TIME TO AT LEAST BE ABLE TO PROTECT YOUR FAMILY WHEN YOU RETIRE. THIS IS A TERRIBLE COMPANY

 

Totally agree. Your defined benefit is frozen as of 09. Anyone with 4-5 or more years to work should be interviewing to move to another company with better benefits, there is no real advantage to staying at BMS.

 

Thanks for your post would like to hear your suggestions on managing the lump sum vs the annuity. In my case I have about 300,000 in a defined benefit plan from another company which is a lump sum you take with you no annuity so I thought I'd use BMS for an annuity. Would love to hear your thoughts. Thanks

 

IT IS A DISADVANTAGE. ALL THESE SCUM SO CALLED LEADERS WITH THIS COMPANY WOULD LIE TO THEIR MOTHER. BMS LIED AND CHEATED ALL THE PEOPLE WHO WORKED THRU ALL THEIR MISTAKES. IF YOU HAVE ANYMORE TIME LEFT TO WORK FIND A COMPANY WHO ACTUALLY INVESTS IN THEIR TOP RESOURCE, THE SALESPEOPLE. LEAVE NOW AND DO NOT SAY YOU WERE NOT TOLD

 

Several things to keep in mind:
1. The older you are when you annuitize an amount of money, the higher the payout. So you can build your own annuity ladder over time, keeping each annuity at 100k with any one ins co max for state insurance protection.
2. You can put whatever % of your tax sheltered funds you want into high quality BAB bonds, they are normally federally taxable- so use in IRA. CD rates suck presently.
3. They are coming out with newer annuities that are indexed for inflation also.
4. Most annuities leave nothing for heirs, but there are other options but they pay out less.

You need to find a good Financial Advisor, fee based, who gets no commissions on product sales. They are out there, ask around. A first appt should be free or forget them. These are the most importage financial decisions you will most likely ever make, do your homework on all fronts.

Good luck.

 

PS I did not get into stocks, there are many directions you can go, high yielding, growth, international etc. It really is key to understand your risk tolerance, can you sleep at night? How much income do you need, etc.

 

Thank you so much for response.

What are BAB bonds?

 

Thanks again for this info.

Besides my question about what BAB bonds are-- Just generally speaking, I realize every situation is different, are you saying you would think about opting for the lump sum if it's over 100,000 and then create your own annuities at the 100,000 level for protection?

 

Here is an option. Invest with the MET LIFE INSURED ANNUITY it is their #2 product (next to life insurance) I retired with a lump a little over 1M and with 401 k etc had about 1.9 to invest I put 1M in the annuity, 250 in municipal bonds (4.6% tax free interest) and 300k in a revenue generating mutual fund...I am rolling the 1300 interest over into buying more stock, because I am not old enough to draw without penalty (59 and 6 months)

Long term my plan is a revenue generator as well as a wealth builder.

This was all devised (except for the bonds) by my outside money manager who does not work for Met Life ( although I am sure he gets a nice commission ). My mutual fund had a 2% front load commission which is a bite, but the low risk and revenue it generates made it worthwhile.

The rest I kept in cash...to live on until I can draw my annuity.

There are many ways to invest, investigate what is right for you.
(The BMS health insurance premium change was a crime!)

 

Very helpful thank you. I truly appreciate it.

Still curious about what BAB bonds are?

 

PS. By the way you are doing very well congratulations!! must feel good to now be able to enjoy the fruits of your labor. I'm sure it took much discipline and solid research to reach these goals.

 

BAB bonds are Build America Bonds, a program that ended several months ago. They are taxable municipal bonds that have Federal backing for a percentage of their guarantee of interest and principal. If you get a good bond broker, they can help you find good quality BABs. Some of the strongest states from a credit standpoint are Washington, Texas, Tennessee, Virginia, Maryland. You should be able to find ~ 20 year maturities yielding around 4-5% or more. If you need the cashflow and hold to maturity, the price fluctuation doesn't matter. A great bond book is "Bonds" by Stan and Hildy Richelson. I think they are releasing an updated edition in November.

Good luck.

 

You are awesome! Thank you

 

This approach seems reasonable, depending on your situation, I do not see any reason however to pay a 2% front load on a mutual fund with so many good no load funds available from Vanguard and others.

 

You also need to consider your personal financial needs

Do you have a mortgage?
Children at home?
Spousal contribution or special needs?
COL in your area?
Retirement needs...health issues, travel, will you work?

You need to rum a spread sheet ....retirement is different for everyone.
I loved the career....but I love the freedom more!

 

How much are you paying thru BMSfor health insurance for your family