Making my own "early out" program

[legs]

I am age 47, am in management and have 25 years with UPS. If I decide to make my own "early retirement" plan and resign prior to age 55 is it possible to buy the same health insurance coverage that I have through UPS on the open market? Also how does my resignation effect my rights to pension payments when I do turn 55 or 65? Is there anything else that I should be considering before making this life altering decision?

Thank you in advance for your help.

 

[traveler]

legs,
I started to write a legnthy reply. So as not to take up BB space and time I am e-mailing you some info. I "retired" at age 46 with 25 years. For me it was ultimately the best choice I could have made but there are pitfalls.
Your retirement money should be about the same as if you retired with your 25 years and were 55 today. Your medical can be continued under COBRA for 18 months (I believe), you pay the full cost and if things are the same now as then you will be offered a similar policy after the 18 months are up. Check that out carefully, thing have changed in the last decade. Good luck whatever you decide

 

[traveler]

Looks like you don't allow e-mails based on your profile. You can e-mail me and I will reply.

 

[legs]

Thank you for the info traveler. I have changed my profile to allow private messages and will also send you an email that includes my email address.

 

[badhab1]

FYI, traveler might be mistakened on the pension benefits if you quit. You will be penalized and the difference will be substantial unless you wait until you are 65 to draw if memory serves. On the money with the benes I think.

 

[traveler]

badhab1
You are correct that you will get less money if you begin to draw a 55 versus some time later such as 65. "Full" retirement is at 65. The years of service and your average of last five years salary (including bonus) determines the amount. For every year you retire before 65 you get a percentage less. "Retire" actually equates to "begin collecting". So, you must wait until 65 if you wish to maximize the amount monthly but be aware, you have foregone the monies you could have collected for that 10 years. Actuarily they will come out the same in the long run because the payout differences are based on how long you would be expected to live (present value/future value of money is also taken into account).

 

[moreluck]

I always say...."take the money and run" ......there's no guarantee you'll live to 65

 

[toonertoo]

Moreluck I Totally agree, take what you can get as soon as you can get it, and get out and enjoy more of you life while you can. We had a guy work 35 yrs, ran marathons, never smoked, seldom drank and dropped dead of a massive heart attack in less than a year. Some payback he is getting now. And this would be my guideline for when to retire no matter what company I worked for.

 

[traveler]

moreluck,

Your preaching to the choir. I retired at 46, began my pension at 55. Took the single life payout. Travel extensively.

Within two years of the time I retired, two friends died of heart attacks (both just a few years older than me) and one more was killed in an auto accident.

Life is too short not to enjoy to the fullest.

 

[badhab1]

Traveler, the scenerio discribed is only with one quitting. Full retirement is at 55 if one stays until 55. Legs needs to total the entire pkg and make sure of what his own financial aspirations are. Congrats on you feeling that you made the right choice. Certainly an individual thing that one must be comfortable with forever. One difference in my situation and most of you that are posting seems to be that I loved work. Miss it every day. Would I go back? Not now but retiring was an inevitability with me, not a goal. All have a nice day. Now I'm leaving for a few days to do some of that traveling that you mentioned.

 

[traveler]

badhab,
Don't want to get in a debate over semantics. I guess it depends on ones frame of mind. There is good and bad to "leaving early", another term. For my family and I, it was surely the right choice. For others, it may not be so. There is more to consider than just the financial aspect though that is certainly important. My blood pressure hit a peak of 185/145 (whew!)... it now regularly comes in at 125/80 and I feel a million times better. Was that all the job? No, it wasn't, but a good part sure was. Other aspects is what you will do with your time. I ended up starting a business, not for financial reasons but to keep busy and for enjoyment. I structured it so I could start and stop at will. It allowed time for family and travel as needed or desired. Now, approaching 60 years old I am turning it over to my oldest daughter a little at a time. Life is what you make it. That's why I decided to stop driving a truck (oops, package car) and join the ranks of management. Well, looking back on it all, I guess I never did stop delivering packages during my career. Bet that sounds familiar.

 

[cheryl]

Are the rules about the availability of health insurance after you resign governed by your home state or is it a nationwide policy?

 

[traveler]

cheryl,
COBRA is a Federally mandated plan. If you are covered with health insurance with your present employer that employer MUST offer you the same policy at their cost plus a small service fee for a term of 18 months. After that, the insurance company may offer you a similar policy at a price but that is not mandated.

 

[dannyboy]

Funny thing retirement! In our retirement package I can choose the high term, which means that they will pay the most, but if I die, my wife gets nothing. The lower option is based on my wife. She will keep getting the payment after I die. IF she dies first, then I get bumped up to the higher payment. Now the really funny part. IF I retire and she and I get killed the next day in a trafic accident, my minor children only get a paltry small life insurance settlement. None of the retirement will ever be paid out. To me, that thought just stinks. WIth 34 years of service and nobody will draw one cent of my pension? But that is the way it currently reads. Gotta love it!

d

 

[traveler]

dannyboy,
In my early days with Big Brown there was no choice for single or dual life payout until a very well liked retired manager died shortly after he retired and his wife collected NOTHING from his retirement benefits. There was a big "stink" made by his friends and co-workers still at UPS. Not too long after that the plan was changed to incorporate the option of survivors benefits. Not sure about the politics of the change as I was a green sup then. I believe that option is now mandated by law.

Though the possibilities of your scenario, fortunately, is quite small, perhaps you and others could talk it up with the HR/Union people and get a useful change made. I'm sure with the minute percentages involved would make the overall cost to the union or company insignificant. The payoff in goodwill created would far outweigh the $ cost.

Before the next post, yes, I am an eternal optimist!

 

[ups_vette]

danny:
A word of caution..Make sure the beneficiary of your life insurance is who you want the benefits to go to.
We had a case of a teamster clerk who was married with 2 small children. He divorced and received custody of his children. He died of cancer 2 years after the divorce. Since he hadn't changed his beneficiary after the divorce, the ex wife received everything. She remaried and sadly shortly after was killed in an auto accident. Her new husband, as her survivor, received her estate which included her ex husbands insurance.
My friends childern never receive a thing from their fathers estate. It all went to their mothers new husband. So a virtual stranger received what should have been the childrens.
Good advice for everyone is to make sure your affairs are in order at all times and know that your estate will go to who you want it to.

 

[dannyboy]

Vette, very good advice! It is the type of scenario that make a man wanna cry, but that is the way it goes.

I will make a big stink out of it. The children should get something, at least while they are minors. I could see where if the children were in their 30's why it wouldnot pay out to them.

d

 

[badhab1]

Traveler, I did not intend any debate. I apologize if it sounded as such. I was merely referring to your comment to legs that full retirement is at 65. That changed several years ago. Once one reaches 55 there is no penalty for leaving. As I said earlier, nothing but congratulations from me on your choice as long as it satisfied you. I think that anyone considering anything of this nature (legs situation) would be extremetly prudent to view it in writing. Have a nice day.

 

[ser1was]

Please allow me to weigh in on the COBRA and private insurance question. First let me say, I am one of the "early retirees" having left at 52. I never considered hanging onto the insurance through COBRA and I would recommend strongly that no one else contemplating leaving before 55 do so either. The reason I chose to go immediately to private insurance was my concern of how insurable I or my spouse would be at the end of COBRA coverage if either one of us was diagnosed with a malady during the 18 months COBRA was in effect. Remember, there is no guarentee you'll be offered coverage by this insurer after COBRA expires. For example, if you had a heart attack 9 months after leaving UPS and then started looking for private insurance when COBRA got close to running out, how difficult do you think it would be to get coverage in light of your recent heart problems? I can tell you, if not nearly impossible at the very least extremely expensive. And if you had gone with private insurance to begin with? No penalty in future payments, just the normal annual increase based on the claims history of the insured population as well as factoring in your age. As an example, my insurance company paid out nearly $30,000 in claims for me as a result of an illness I had last year. This year my premiums only increased $75 per month. The prior year (before I started submitting the claims) my premium had increased $60 per month. Both the normal increase passed on to all insured's in the group. So I'm confident I wasn't personally "penalized" for the $30,000 paid by the insurance company. You should be financially in good shape if you're considering an early leave. That being said, in my opinion it's not worth the gamble of saving a few bucks for 18 months if in the end because of some medical misfortune during that period, you wind up being close to uninsurable and pay outrageous premiums for the rest of your life. Buy the private insurance now, while you and your spouse are both in good health and avoid the worry of whether you'll be just as healthy 18 months from now.

 

[hr]

Great advice ser1was, no one can predict their health care needs. Anyone considering "early retirement" would be well advised to consider your message.