Use the SIS Pension Fund to supplement your income during the years before you get Social Security.
First, you should find out about how much your Social Security benefit will be.† You can get an estimate of your Social Security income by using the calculators at the Social Security Administration website. †You may have sent you an estimate of your benefit in the last year or two.† One thing to keep in mind is that the estimate you sent you assumes you will continue to make the same amount of money each year from now until you turn age 62.† If you retire before that, your early retirement will cause your monthly Social Security income to be somewhat lower in amount. You can also contact your local Social Security office for help in estimating your actual monthly income.† You will also want to consider your spouseís social security income.† Typically, once your spouse reaches age 62, your spouse will receive an additional benefit that is 50% of your benefit for a total family income of ~150% of your benefit.† Your spouseís benefit will be adjusted for your spouseís age when that benefit begins and may result in a benefit that is less than 150% of the primary benefit.
If you have enough money in your SIS Pension Fund account, you can avoid using the NASI Pension Fundís Split Level Option to solve the problem of not receiving Social Security benefits until age 62.† You can use your SIS Pension Fund to supplement your income during the years before you begin to receive your Social Security benefit.†
Here are a few ways others have used their SIS Pension Money to supplement their retirement income.
1) Elect a seven-year installment.† The monthly payments will supplement your NASI Pension Fund benefit until you begin to receive Social Security benefits.† This will take some planning.† You will have to figure out how much per month you will need and then figure out whether you have enough money in your SIS Pension Account to purchase the installment. If you donít have enough money, you will have to consider whether you can afford to retire yet.
2) Elect a two-year installment with a portion of your account (even though there may be more than two years until you turn age 62).† This way, you can learn whether you are taking too much per month or too little and make an adjustment when you elect your second and third two-year installments.
3) Withdraw a part of your SIS Pension money designed to supplement your pension for one year.† Put your money in a Money Market savings account and withdraw 1/12th of that amount each month.† This way you are ready for an unexpected expense and if you find you are not using all of the money you thought you would, you just wait a few extra months until you are ready to withdraw another lump sum from your SIS Pension Fund money.† If you run through the money faster than you expected, you can decide whether to tighten your spending habits or to withdraw more money from your SIS Pension Fund account for the next year.† You can make as many withdrawals from the SIS Pension Fund as you want.† The application process is not as easy or quick as withdrawing from a bank account, but it is not so hard that you would need to avoid multiple withdrawals.
If you plan to use this method, you should take a lump sum distribution in the amount of your expected yearly expenses.† Do not elect to transfer that money directly to an IRA if you are under age 59 Ĺ.† If you put your money in an IRA, then you will subject to a tax penalty for withdrawing it before you are 59 Ĺ.† By receiving a retirement distribution from the SIS Pension Fund, while the money you receive will be taxed in that year, you will not owe a tax penalty on that money.†
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