Letter Re: The Pension Gamble: Cash In or Stand Pat?

Dear JWR and SurvivalBlog Faithful:
Here is a dilemma that I may encounter soon and one that other Survivalblog readers may face as well.

I work for the state (which is in dire fiscal condition) and face a possible layoff later this year. When and if this layoff occurs, I will have the opportunity to cash out my pension fund, which after penalties and taxes, would amount to about $50,000—a tidy sum indeed considering I have no other savings except for 4-1?2 ounces of gold and several hundred dollars (face value) in silver coins (thanks to SurvivalBlog’s admonitions and a re-ordering of my discretionary spending in the past year). If I were to leave the pension intact, I would receive approximately $2,100 in monthly benefits beginning in 2017.

The conventional wisdom is to leave the pension fund intact to ensure subsistence funds for the not-too-distant future. I have been called foolish by some (parent, attorney, and friends) to merely consider cashing in my pension early. “Whaddya? Crazy?

If one subscribes to the survivalist way of thinking, an economic or societal collapse will most certainly occur prior to 2017 that would likely reduce or eliminate my pension benefits.

What to do? Take the sure thing, cash in the pension early and invest in silver, gold and other survival provisions? Or roll the dice and hope that society remains intact [and inflation remains low] for another decade or two? SurvivalBlog readers, what would your decision be? Cash in or stand pat? – David J

JWR Replies: My vote is to cash in. Put at least half of the proceeds into survival preparations, and invest the rest in precious metals. One option for folks with 401(k) and IRA plans is roll them over into a precious metals IRA. These special IRAs are available through Swiss America. With them, you can avoid a tax penalty, yet have it invested in gold.