Which one did / will you choose….. and why?
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4-8 % = lots of risk in this Stock market add 1% commission and a Biden administration, you’ll be looking for another job. You could outlive your lump. Please be careful.
A reputable financial planning company can provide sound advice on whether to take the lump sum pension or the annuity or a hybrid. For the lump sum pension option rolled over to an IRA, a financial planning company can usually show you how your lump sum IRA will return 4 to 8% per year over a 25-30 year period as you withdraw cash from the IRA.
Also remember that your 401K will always be a lump sum rolled over into an IRA for disbursement.
Take the money and run.
Be careful with that lump sum, great when this market is booming, But a reset is coming. I was in Baton Rouge in 2008 when the market tanked, most of the guys that took that lump lost major, some lost it all . wanting to jump off the flare stack. still taking what they needed to live and never made it back. Those that listened to their financial planner and resisted getting out, in recovered but took 10 years. All good when the stock market is booming, but beware and these guys don’t work for free most 1%....and while your down they still get paid.
Briegs in nj
For the person that claims their Money Manager has been able to make your lump sum so profitable that it makes more than your salary, will you please let us know who your money manager is?
This would be awesome!
Lump sum can go down as well as up but pension will lose on avg. 3% a year due to inflation..
Money manager has been able to increase lump sum value more than my pay rate while working.
For 33 years I was a pension person based on what would let me sleep best.
I am now a lump sum person. Same reason.
@1lzx+1cuq90u8 Brilliant! Did you short EM stock? LOL
Took lump sum in June. Already doubled it with 2 trades. Don’t settle for measly 2-5% annual returns.
I took lump sum and rolled directly into traditional IRA (no tax consequence). Reasons: 1. I'll do better if I manage to get an average 5%/year return, and, will be able to take out same amount (even inflation adjusted in coming years) as annuity anytime I want to after 59 1/2 with remaining principal continue to grow year after year - never run out of money & plenty left for my kids; 2. EM annuity is fixed (no hope for adjustment for inflation); 3. There is an end to annuity - $0 left for your kids; 4. It's not impossible that EM may decide to "transfer" the pension liability to a private firm some day - many private companies have done so (do your own research). If this transfer happens, I can't imagine getting a pleasant service. What do you think?
My plan had always been to start the annuity five years after I left XOM and the annuity reached its full amount, (based on my age), however when XOM sent me the paperwork for a heavily discounted lump sum option, I did the math and realized if I took the lump sum and invested it, I would need only a 5.6% annual return (dividends and appreciation) to start taking the same "annuity" five years later and never have to touch the principle. Having a good amount already saved, I decided it was worth the risk so I took the lump sum (based on very low 1Q 2021 interest rates), rolled it into an IRA and invested in a S&P500 index fund.
@rud+1cuq90u8 - I believe now anyone vested (five years of company service) has a one time chance to take a lump sum when they leave the company and that can be deposited into a tax deferred account (IRA, 401K,...)
Can you take the lump sum if you leave and are under 50? And roll it into a 401k or something
Don't forget inflation. Annuity is a fixed amount and never changes, while lump sum can grow with inflation if invested properly.
Lump sum, with the company as it is today did not feel confident that funds would be there in the future.
I am taking lump sum and rolling o we 592k. No strings to attach me. No trust in the future if this establishment.
Like everything else it depends on lots of things and everyone's situation is a little different. What are the segment rates? Higher interest rates result in smaller lump sum and vice versa. Do you like steady predictable monthly income? If so, the XOM pension has a lower management fee than any annuity. Are you a spender, do you want to manage your own investments, do you want to leave an inheritance. How long do you expect to live? If you think you will live longer than your mortality on the table XOM uses then the pension will look better. Do you want some pension and lump sum then do 50-50 or 25-75? etc. Join one or more of the retirement planning groups that meet on campus and by zoom, take the XOM late career retirement planning class and the guide book from that also has tons of information. Also there are lump sum calculators on the benefits website.
Lump sum and transfer to 401K or retirement account to avoid extra taxes taken out.
Lump sum. Do you really trust them with anything? Much less a pension.
Your pension dollars are invested in low yield corporate bonds currently getting just under a 3% return. If that's your personal investment strategy then the lump vs annuity is about the same at the end of the day. The main reason for this investment strategy, is the company can't have a market swing resulting in an underfunded pension plan. They may have to Billions to the plan one quarter which could impact stock price significantly.
If everyone departing, voluntary or otherwise, took the lump sum.
What would that do to the books?
And which books would it do it to?
The 2nd or 3rd set of books kept by the company?
Deeper than that?
Will I end up paying for my lump sum through taxes?
In Texas?
Lots of questions but 'I need my money now.'
sniff
As of June 2020 you can take the lump sum if you leave or are terminated.
Are they still offering early pension lump sums for those that didn’t retire with the company?
I don’t know anyone that took the annuity over lump, I’m sure they are a few though
Lump Sum without question.
Circumstances will determine what and how you treat it - many factors.
You might go insolvent if you make the wrong decisions.
EM will be insolvent along with their pension system long before that.
"But it's protected!"
Yeah. Right.