Accounting, Payroll & Pension Issues/IRS 415 limitation


I am 58 years old and separated from employment in 2011. I'm fully vested but my defined benefit retirement payment was limited due to IRS 415 limitation, so thus far I've elected not to begin my retirement benefit.  At the time of my retirement I would have been eligible for an annual pension of $136,000 (joint survivorship wife is 55).  If I wait till I'm 62 I will be eligible for $200,000. I believe today I would be eligible for around 150,000.  We are both in excellent health so barring accidents, I'd expect we will live at least into our mid eighties.  Am I making a mistake by deferring my retirement assuming I have sufficient income/funds available for living expenses till age 62? I've been very blessed, so that is not an issue.  I assume this is a future value/net present value calculation, but I really have no idea how to begin to do this. However, it seems the growth in my pension appears to be a better deal assuming I live into my eighties, than taking the smaller payments today and investing the after tax dollars. I would greatly appreciate any help you could give me on the financial decision. Thank you in advance for your help.


When it comes to defined benefit retirement plans, the longer you can wait, typically the better the return. I think you are on the right track with your assessment. As of 2013 the IRS 415 limit will be 205,000 per year, and will most likely continue to increase as you get older, so I do not see a large issue there moving forward for your retirement benefit.

Based on the numbers you have provided me, waiting the additional 4 years would provide you with a very high annual return for your pension plan. Most likely much higher than you would see through taking your pension today and re-investing it in the market. So, if you are able to live comfortably until age 62 and take the larger payout then, I would certainly do that.

I hope this helps with your decision. If you have any other questions, please do not hesitate to ask.


Tony DePasquale
Elysien Private Wealth

Accounting, Payroll & Pension Issues

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Tony DePasquale


Pension plan questions, investment management services, plan fiduciary services, profit sharing, defined benefit planning, defined contribution planning, 401(k), 403(b), IRA rollover, plan consulting services, plan structure and plan design consulting.


I have over 10 years experience regarding pension plan management including; investment fiduciary services, plan structure and design, plan administration, employee education, Uniform Prudent Investors Act (UPIA) services, overall plan management consulting, Employee Retirement Income Security Act (ERISA) law and Department of Labor (DOL) law.

Nevada Business Magazine Henderson Press La Voce International Magazine

BA Economic History, University of Nevada Las Vegas Independent Pension Fiduciary ERISA 3(38) Investment Fiduciary ERISA 3(21) Fiduciary

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Las Vegas Chamber of Commerce Excellence In Client Service Award In Business Las Vegas - Who's Who Banking & Financial Services

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Elysien Private Wealth - President Private Wealth Merrill Lynch - Financial Advisor

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