Is the following statement correct? The lump sum pension amount is calculated off of the current rate of the 30 year bond. A higher interest rate for the 30 year bond means a lower payout amount, and vice versa.
Where is the rate they use found and how often does it change?
How does your age affect the lump sum?
Is there a best age to retire to maximize the lump sum?
Thanks for any input.
Talk to those who e retired already. No one left without knowing every detail.
The best age? ASAP... of course.
Speak with someone and your union hall and get the name of a financial advisor your getting pieces of information but not all correct what nobody is mentioning is 1st and most important get to your 30 year mark 2nd is your age plays a big factor the older you get your lump sum goes down considerably if you have 30 years there's a big difference between age 52 / 53 and 59 hundreds of thousands prior to 59 you can set up a 72t and develop an income that is penalty free speak with an advisor its free they want your business
No matter what, your lump sum will be nothing but crumbs. Not the millions needed to retire early and you will be a director level wireless position to achieve that. Not a blue collar ho-e climber job.
No one says “stringing wires”. Seems you’re not in this industry.
Yes the gatt rate is whatever the 30 year treasury bond is but the gatt rate in the second month of the quarter is what the following quarter will be locked in at.
based on gatt rate. use the estimate my pension section on the about you to estimate your pension using either the current or another gatt rate. you can estimate your pension in the future to determine the best age to retire. only works until the end of the contract because lump sum is only offered for the life of the contract may not be available in the new contract. call a financial planner such as 10-15 to ask about setting up a 72t so you don't pay a penalty. the can model different scenarios for you. this decision is too important to take random peoples advice on an anonymous board on the internet.
smarten up
Some dreg on here said he made $45 an hour stringing wires. Like he was proud of that. Wowowow 😂🤣 that is poverty level here.
The waitress doesn’t need to know your name.
You wke up early this morning. Nobody Cares
regarding the best age to retire with the lump sum, I thought I read that it's about 59 for union members. This assumes we're talking about the interest rate remaining constant. after that the amount being contributed does not quite counteract your ages negative effect on the amount. Can anybody else verify this?
True ignorance is using that word repeatedly.
How come all these union dregs are ®etards? Can someone answer why they are the d-mbest and laziest people on earth?
This is a layoff page Rah Ta-d. Go talk about your pitiful crumbs at the local bar where you home office out of.
@rhb+1bJkXeBT, shhh, be quiet, the adults are talking finance here.
Go ask your steward unionite.
I didn't see the other part about the age thingy. Here is Fidelity with all sort of info, mostly useless:
https://www.fidelity.com/learning-center/personal-finance/retirement/lump-sum-or-monthly-pension
"If you don't roll the proceeds directly into an IRA or an employer-qualified plan like a 401(k) or a 403(b), the distribution will be taxed as ordinary income and may push you into a higher tax bracket. If you take the distribution before age 59½, you may also owe a 10% early withdrawal tax penalty."
So, basically you'd have to wait till the 59.5 age to get the pension lump sum without penalty from uncle Sam and higher tax bracket. Also keep an eye on the interest rate, the one feds sets. Double check with a guy that has some acronyms after his name, like a CFA, CPA...ETC
Also, I think there is a penalty if you DO NOT start withdrawing min. monthly amounts after the age of 72 from your pension, but I don't think that's your case.
https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-required-minimum-distributions
There is one more thing about pensions being Direct Benefit and Direct Contribution and I don't know how this will affect you. You might want to give that an once over.
That is pretty much it in a nutshell. The pension lump sum is determined by the GATT or PBGC rate. Whichever is the more favorable of the two. Right now it is the PBGC at 0%. Its Expected to go up some time next year.
The higher the 30 treasury bond rate, the lower the lump sum. The gatt rate is the average of the daily 30 year rate for the month. Verizon has quarterly gatt rates that are used. To get the quarterly rate, it is the average for the month 2 months before the quarter. So for this quarter, July, August and September, the average of May is what counts. I have hear that some VZ areas go by the month you retire, but I am not sure. You can google the monthly rates for the 30 year bond. A younger person will have a larger lump than someone, who is older, with the same amount of time. Just do not retire under 55 years of age because there will be a penalty, unless you have 30 years or more of service.
Here is an article explaining a bit about this issue, in general terms about the interplay between the interest rates:
https://www.mainstaycapital.com/pension-lump-sums-and-the-effect-of-changing-interest-rates
Your statement about the interest rates has 2 parts: Market interest rate (the one the federal reserve sets) and bond coupon rate (probably set by the treasury when they sold the bond). If/when (let's say next year, what the heck) the federal reserve decides to increase the market interest rate, the value of your bond (and pension lump sum) will go down because the newly printed bonds will be more attractive to investors, given the higher interest rate. The current bond holders (the one holding your bond) will have to dump the existing bonds at a discount (lower price/higher yield) to get rid of them, if you want to cash it out. Given the fact that currently market interest rates are very low, I doubt the value of the bond or lump sum pension amount would go up if interest rates go down. When you hear talks about increasing the interest rate, get ready to see the value of your pension lump sum going south.
This is my take on it, I haven't done the math to prove it, too lazy this morning.