The Pension Protection Act will be enacted effective January 1, 2008.  This law has the potential to negatively impact your lump sum pension disbursement, if you elect to take this form of payment.  As individuals nearing the date at which they would like to receive a lump sum distribution, these potential changes in the interest rates assumptions become important.  A higher rate will produce a lower lump sum distribution.  By itself the act will cause rates to increase from year to year during the phase in period.  Experts predict that this could result in approximately a 2-3 percent reduction in the amount of a lump sum distribution if all other factors remain in constant.  If you are going to retire you need to consider these changes while making your decision.

While on the subject of retirement, when you plan to retire ask yourself these 2 questions.  How much is the cost of medical going to be?  If you retire at the age of 57 you will be paying medical coverage until you are 65 or Medicare eligible (8 years).  How old is your spouse?  If your spouse is younger than you then you will be paying the cost of his or her health care until he or she reaches 65 or they are Medicare eligible.  For example, if you retire at the age of 57 and your spouse is 5 years younger than you.  That means that you will be paying health insurance for the next 13 years and this could take a big portion of your retirement savings.  If you have any questions or concerns regarding retirement, please call and we can set up a time that is convenient for you to discuss this important step in your life.