Anyone willing to share what their current lump sum balance is? And how many years you have worked for Ford?
23 replies (most recent on top)
LL6 with 32 years ... 1.5M
Don't forget. It's not just the lump sum. There is a 401k also.
For those who think $1M is a lot of money, it has to generate a livable income for the rest of your life. If you use the 4% rule (I know it's dated, but better than nothing), that's only $40k per year. Granted, it is much better to have it than not, but it is not the windfall that some people think.
@arh+1iakvMpR: The lump sum does include the equivalent of the supplemental payments in the monthly pension.
Whatever value of your lumpsum pension payout, just know it will drop 25-30%. Factor that into your work plans, retirement plans. I say everyone should always be prepared, regardless your intent, that your job will be eliminated/involuntary severance- especially if you are 55+ years of age.
@jll+1iakvMpR Maxing out the HSA is similar to maxing out the 401K. They gain interest tax free.
I wonder how my management would react to my request for college tuition reimbursement. I would like to go back to school to be a HTHD engineer. Age 56 with 33yrs of service.
"Max out the HSA".
I have under 5 years FT at Ford. Is this related to FTE who have around longer?
Thanks in advance.
LL6 Age 58, 23 years with Ford
$905k in Lumpsum
$960k in 401k
Undecided on retirement
Will probably get only 70% of my pay if I work elsewhere
You also need to know if the estimate has a contributory benefit or not. That will substantially increase things.
Personally, I did not contribute to the GRP because I want full control of my investments whenever possible. I have just over 20 years service , one of the last GRP people. My lump sum is currently 10% of what I have in my 401k.
Keep in mind this is just the lump sum. Many people also have a sizeable 401k account as well, in addition to this.
Note that you can take your lump sum pension and invest it into an annuity, providing a set amount every month, just like a monthly annuity pension from the company. I did so last year when I retired. The good thing about taking the lump sum pension is that it is yours in totality, inherited by your family when you pass.
Most good savers probably have at least that much in their 401K plus outside investments. I figured the pension was 1/3 of my nest egg as it did not fully mature until I made it across the 30yr milestone.
I never missed a company match and usually rolled my profit sharing into my 401k. On the outside I bought non deductible IRAs and eventually converted them to Roths. I continued to buy Roths and Max out the HSA without dipping into it either. I never leased a vehicle and only bought a couple new vehicles and drove them over 100K miles.
So in total close to $3M nestegg... and If I would not have been such a fool buying and selling Ford stock at all the wrong times I would be much richer. As a new hire I should have been buying the original common stock fund in the original investment plan.
The lump sum or pension is not enough to live on..
I did not get up every morning for 30 some years to be poor in retirement.
It will take time and I suspect it will be hard spending this horde down at first but I think I will get used to it.
Another thing to consider is the safety of the monthly payments. Is Ford going to be around in the next 10 to 20 years. If Ford goes out of business, gets bought out the pension goes into a Federal Pension Insurance fund (PBGC) which pays pennies on the dollar. Kodak is a good example.
There is too much risk with monthly payments. Make sure you consult a Financial Planner.
Get good counsel and do what's best for you.
Pros:
Lump sum gives you the money now, and forever
Pension gives you a predictable monthly cash flow . .Gets you easily approved for borrowing if you want to. Pension adder up to age 62 is a nice perk.
Cons:
Lump sum only as good as investor you are, or pay for. Big chunks of money get spent.
Pension amount never changes and inflation will take a bite over a lifetime.
@ens+1iakvMpR
I'm also thinking annuity even though my lump would be slightly more than @jyu+1iakvMpR. A couple of reasons. I'm a terrible investor with almost no tolerance for risk plus I can't see my spouse having any idea how to handle this lump sum if I die (spending or investing). Yes, I realize she might have more money if I took the lump and died sooner rather than later.
SG8 33 yrs age 56 with contributory $1.2M
Pension is well funded and better deal but I want separation with FMC.
Anyone taking the annuity? I know that it keeps you "vested" in the health of Ford Motor Company. I personally think they will be around for the rest of my lifetime. Everyone talks lump sum. I know plenty of people who are retired already with the annuity. And plenty who took the lump sum. Yes the lump degrades in value over time due to inflation, but with a healthy 401K and other investments there is value to the security of an income stream that doesn't have to be managed.
Thoughts?
And way to go. Great job. So glad for you. Super job!!!!
@jyu+1iakvMpR, you need to retire and enjoy life.
I am FRP only. No pension. I am extremely envious of anyone with 30+ years at Ford. I would 30 and out, take the lump sum, and if still young enough, go work for a competitor. Imagine working for a company and not caring if you stayed or not. With over a million in the bank, it would be so freeing!
Why are you not retiring, @jyu+1iakvMpR?? I've heard the drop for someone like you will be in the $250k-300k range. That will be like working for free the next two years! I am assuming you have 401K as well, hopefully in the 50% of lump sum (or more range).
If I were you I'd retire and go work for Stellantis!
Just a reminder, lump sum depends on compensation, interest rates, years of service, and age.
LL6, 30yrs service, ~$1,050,000 with this year's interest rates. Will drop substantially next year.