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Retirement Planning/Will My Pension Continue To Grow


I joined IBM in 2002 and left them in 2007. Having five full years of service made me fully vested. My questions are, If I leave my pension with the company will it continue to grow? If so, how can I track the rate of growth for the pension plan? My age is 61.

The Financial QB
The Financial QB  
Thank you for your question. I hope I can give you some better insight but unfortunately not all pensions are the same. In order to get a more precise answer in reference to your particular pension it would be best if you contacted the custodian directly and ask them the question. If unsure who the custodian is, you will definitely be able to get that info from your benefits coordinator at IBM.

For the most part a pension is a gurantee to pay a certian dollar amount based on a certain mathematical formula, your accrued benefit, and your age. In your particular situation it seems you were able to become vested in 5 years. Usually you will have two options when you are terminated from employment with your pension. You may elect to be paid your monthly benefit for the stated amount of time you select or you may elect to make a Lump Sum rollover of your pension into an Traditional IRA. However, once you terminate employment with your employer who is providing you a pension, it is not common that your pension benefits will continue to grow. The employer is only on the "hook" to provide the benefit you earned. No more no less.

However, please contact the IBM benefit dept. to get more detailed information on your particular benefit.  

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Richard E. Reyes, CFP


I can provide answers to questions relating to retirement especially relating to; income distribution, tax efficiency, long-term care insurance, life insurance, estate planning, asset protection, variable and fixed annuities, alternative investments and prudent portfolio design.


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