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Thread: Retirement money question

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    #1

    Retirement money question

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    Dh was telling me that next year when he reaches his 15 year mark he can get like 30,000 dollars of his retirement pay early. He said it would just make it so that when he does retire at 20 years....his monthly retirement pay would be a little bit smaller. I have zero information on this at all and would really like to know more about it. Are there penalty's for doing this? Will it screw us in taxes? How much LESS each month does it leave for the montly installments after actual retirement?
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    It's called redux. You will pay taxes on it. I can find more information on it after I take the kids to the busstop. My DH knows a lot about it but he's at work at the moment.
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    Thanks! I read it, but honestly didn't understand most of it
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    Quote Originally Posted by Ste9 View Post
    It's called redux. You will pay taxes on it. I can find more information on it after I take the kids to the busstop. My DH knows a lot about it but he's at work at the moment.
    Any info you can give me I would greatly appreciate. I tried reading about it myself, but I still don't quite understand it.
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    #6
    dh was offered that but declined it
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    Quote Originally Posted by CoffeeGirl View Post
    dh was offered that but declined it

    Do you know why...if you don't mind sharing? Is it not a good idea? I just want to try and find out as much as possible, so that he doesn't make a really bad decision.
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    #8
    well because he can recieve more over a lifetime that just the 15,000 so he/we thought it was a wiser(is that a word? ) choice

    HTH -I know it is a hard choice to make-good luck
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    #9
    Under REDUX you can take the $30,000 and depending on your tax bracket can lose up to half of it to taxes, however if you get it while in a tax free zone you pay no taxes on it.

    When you take the Redux your retirement at 20 years is lowered to 40% of your average base pay for the three years prior to retirement. Without redux it is 50% at 20 years.

    If you take the redux and stay in longer than 20 years then each year past the 20 year mark raises your retirement pay by 3.5%. If your DH stayed in for 30 years he would get 75% even after taking the Redux.

    According to DH you should only take Redux if you plan on staying longer than 20 years so that you build your % back up OR if you can invest that money into something with a high return. He says that it's a really bad idea to take the Redux and use it to buy a new car, pay off bills, etc. That's what a lot of people are doing and in the long run it will hurt them more than it helps them.

    We had a friend who took Redux, paid off their vehicles, paid off their credit cards, then went out and bought a new truck and furniture,etc and were struggling again within months. It should not be seen as "pleasure" money.

    Hope that helps.
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    #10
    Ok this is all really good to know. He is thinking of taking it to put in some savings thing...to earn more money....but honestly it doesn't earn that much money and I am thinking it really won't be worth it at all.
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