Conference nyoss1::market_investing

    Without having any concrete data, I would suggest he really consider
    the option that continues to pay your mother.  My Mom benefits from
    my Dad's pension 16 years after he passed away, and, based on her
    family history, hopefully has at least ten more years to live.  My
    Dad's employer has also voluntarily increased the pension over the
    years to offset inflation, even though they were under no obligation to
    do so.  As I recall women generally live something like 8 to 11 years
    longer than men, plus since wives tend to be younger than their
    husbands, your mother could be looking at quite a number of years.
           

    Without additional information around your folks current situation
    (e.g. other sources of current income, ability to raise or lower their
    current standard of living, and so forth), I would agree with Karen in
    .1.  My mother also benefits greatly from my father's pension, three
    years and running at this point.  Unless they absolutely need the money
    to get by, go for the reduced amount with the spouse/survivor
    provision.
    
    Congratulations on your parent's situation.  I hope they both live long
    and enjoy their years together.
    
    Chuck

    I third that motion. My grandfather worked for the gas company for over
    forty years. When he retired, my father and aunt talked him into taking
    a lesser amount in monthly payments, but which would continue for my
    grandmother after his death. Well, when he died seven years
    later, they were surprised to hear from the gas company that grandma 
    was entitled to the company newsletter, and nothing else. Seems she had
    talked him back *into* taking larger monthly payments, either not
    grasping or not caring that they would stop when he died. 
    
    Speaking as a former actuary (however briefly), you should beware of
    using actuarial data to guide financial decisions for an individual.
    Actuaries can use broad trends as a guide because they deal with large
    sectors of the population, where quirky differences even out. But take
    my parents-- though we had never really said it out loud, my family had
    always more or less assumed that my father would die some years before
    my mom. Her mom died at 86, and all her older sisters are quite
    healthy. Then three months ago, my mom was diagnosed with liver cancer,
    and within two weeks she had died at 64. My dad was due to retire
    within a month; he had to scramble to change his retirement plan so
    it gave him the higher amount.
    
    So in any investment strategy, don't just plan towards the most likely
    case. Look for a plan which will provide for your folks no matter which
    one dies first, or (which I sincerely hope) if both live to a ripe old
    age.
    
    btw, what my Dad opted for in the end was a plan which gave him $150
    less per month, in exchanged for a guarantee of ten years of payments
    even if he dies before then. Myself, I'd prefer that he had taken the
    extra $150--it would come in handy in his 80's, and we kids can take
    care of ourselves--but he says he worked hard for that pension and
    someone should get it even if he can't.
    			Good luck,
    				Jim B.

I've heard of a plan where you take the higher payout and use the 
extra to purchase term life insurance, providing a lump sum when
the pensioner dies.

I don't know if this makes sense or not.  Seems to me that at
pension age, you can't get much life insurance for the extra
money.

Opinions?

Wes

If the individual is insurable, shifting extra income to life insurance
can be an interesting way to avoid (some) inheritance taxes.
The premiums be come a gift counting against the first untaxed $600K,
but the death benefit doesn't count.  You need to be rather wealthy
and insurable (no existing conditions...) to make this worthwhile.

R.

    The point in .4 (taking the larger amount and using the delta to buy
    life insurance) is an excellent illustration of how there are different
    ways to accomplish the same financial goals.  Great idea - thanks !
    
    I understand the risks of generalization, but if a technique like .4 is
    used to hedge those risks, then it is possible to safely use the
    results of the comparison.  So now, I'll propose to my father that we
    look at 3 scenarios, the 3rd being .4
    
    It's interesting to look at the data I found.  Some of the tables
    appear pretty straightforward.  Others disagree, but have labels that
    make them sound different (like GAM - Group Annuity Mortality - which
    has different numbers - at 70, GAM has 0.025516, vs. 0.03839 in the
    pure (I think) Mortality table - maybe people who buy annuities tend to
    have a lower mortality rate?).  And another table is labeled "US Reg
    830 Selection Factors" and has 16 columns per age.  This one I would
    like to understand, since it has a version specific to non-smokers.
    
    If anyone is interested, you can pull down the entire sw package from
    the website in .0.  Or, I'll put a sampling of the tables that I was
    looking at in NPSS::USERDISK3:[BENZ.PUBLIC.ACTUARY_TABLES]
    
    (So, no one knows of any readily available sw to help with the
    calculations ?  Does Quicken's Financial Planner get down into details
    like this ?)
    
    \chuck

    Managing your money has a brief section, I think Quicken might, and I
    believe there was a section on the SAVE disks that go out each year.
    
    Frankly, I'd be real surprosed if someone doesn't have a web page
    questionaire that does this.
    
    jeb