posted on Sep, 20 2010 @ 10:13 PM
I'm not sure if this is the proper place to post this. I was going to put it up on an off topic forum, but I couldn't spot on that seemed to be a
good fit. So here I am.
The reason for this post is that I am hoping to get some opinions and perhaps advice regarding the situation in which I currently find myself. I have
been unemployed for the last few months, but I start a new job tomorrow.
I spent most of 2009 out of work as well, but was able to get into a
contract position for the early portion of this year. In order to get by, my wife and I had to depend on using a credit card in order to pay rent and
a few other expenses. We don't spend a lot of money, so we've been able to avoid heavy debt. Now we find ourselves a bit in the red on the credit
card, and we have a car loan as well.
I am sharing that because I was recently made aware of some money which I can obtain, should I feel compelled to do so. That money is the pension
which I'd earned at the job I was in prior to my first period of unemployment. I worked there for just over ten years, so the funds available are
This is where I am seeking input. Given the state of the economy right now, and the uncertain future we face in the USA, my wife and I have been
discussing the option of taking a one time lump sum payment of the pension money. Doing so would allow us to wipe out the recent debt we've
accumulated and deal with a decent portion of the car loan. The downside to taking the money early is that there is a 10% penalty and it would be
taxed as well. The fellow I spoke to about it stated that it would likely be taxed at around 25%.
What would you do in our situation? Take the money and throw it at debt? Let it remain where it is so that it's there about 30 years from now when I
will be eligible for monthly pension payments? Or perhaps something else?
My biggest concern with not taking it now is that if the economy continues to get worse, it will essentially be lost, either due to bank issues or
something else. I have no idea what kind of legal obligation there is on the part of the banking system to make sure that that money remains
available, regardless of the state of the economy, but I am very wary of the whole banking system. My gut tells me to take the money now and plan
accordingly for the future, but I'd really appreciate any input any of you may have on this type of situation. If any of you have gone through this
sort of thing before, please share your thoughts.