Thread regarding General Motors layoffs

Retirement in your future?

With lump sum pensions anticipated to drop 10+ percent in the next months, are many considering retirement now? Will such present a “brain drain” or a welcoming situation?

by
| 1689 views | | 6 replies (last )
Post ID: @OP+1bnGvwl2

6 replies (most recent on top)

Interest rates go up and pension lump sums payouts go down.

by
|
Post ID: @Exzb+1bnGvwl2

I took lump sum from EDS pension last year. Payout was estimated based on March 2020 interest rates and actual was based on August 2020 which was at an all time low. Given the inverse relationship between interest rates and pension or annuity payouts, my payout was 14 1/2% higher than the estimate.

by
|
Post ID: @pnch+1bnGvwl2

The real question is whether lack of experience is worse than the bad behaviors of outgoing employees. I would take a lack of knowledge over corruption, politics, sabatoge, dishonesty, and reckless hubris. It's truly amazing how these behaviors became acceptable to pre-retirees, lifers, as well as pretty much anybody in the decade plus club.

This is Pontiac...this is Milford.

by
|
Post ID: @afhb+1bnGvwl2

Anybody that predicts how much lump sum amounts are going to change at this time is just guessing. The lump sum amount is dependent upon a certain federal interest rate that is published sometime in mid-August or so. But you can't take the historical data and project it, because the calculation is based on just that one data point. So even if it's somewhat of an outlier, it's still used in the calculation. The other factor is expected lifespan. After going up on a regular basis for a while, the life expectancy dropped a few years in a row recently, primarily due to the opioid crisis. Perhaps Covid will change that as well. So when you're thinking of retiring and taking the lump sum, you may have to wait until the last minute to tell the boss you're retiring Sep 1. When I retired in 2015, I told my boss I may retire Sep 1, 2014, or Mar 1, 2015. Couldn't make the decision until just a week or so prior to Sep 1, at which time I said I'd retire Mar 1. The strategy of a Mar 1 retirement date is that after returning to work after the Christmas break, you only work two weeks, then take your six weeks vacation, which takes you to the Mar 1 date. That way you get the bonus payment for the partial year as well.

by
|
Post ID: @8ydl+1bnGvwl2

Based on changes- IRS value segment rates used to calculate lump sum pensions.

by
|
Post ID: @esf+1bnGvwl2

Post a reply

: