Trying to decide if I am involved in a surplus what to do with pension. I am in the Southeast and have the choice between the two. I am 53 w/ 25 years of service. Looking for thoughts on this subject.
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Retiring in April. For sure taking lump sum. Don’t trust this company
I did the lump sum at end of 2022 at 58. Had an Ameritech pension Went to work else where in 2023. Made far more on the money in 2 years on the pension than if I had finished out my career at T.,plus better work environment.
“I agonized over the decision when I retired in 2020.”
Why are T employees so stupid?
What’s to agonize over? Everyone knows you take the lump sum. You people are seriously low IQ
I did the lump sum…. I left 4 1/2 years ago. Everything is great.!
I agonized over the decision when I retired in 2020. I evaluated the pros and cons of each, and decided to take the lump sum. I rolled it over to an IRA with Fidelity. They have a great website with access to over 3,000 funds, and is very flexible with how you can set up monthly withdrawals and tax treatment.
You can set your portion of investments based on your risk tolerance. They set me up with 15 funds spread across 60% equities, 30% bonds, and 10% cash. We set up the monthly withdrawal (2.5% of total invested) to be the same % across all funds. We review and make quarterly adjustments if necessary. I kept my T stock for the quarterly dividends.
With the exception of 2022 when the market dropped about 25%, my funds have done well. It has since been all made back plus more. Cash flow is king, and with social security, monthly IRA withdrawals, and quarterly dividends, I am managing well.
Another important fact is to eliminate as much debt as possible before retirement. I started several years before retirement reducing debt, and was able to retire debt free, which has made a huge difference.
Good luck!
He said he's Southeast which means cash balance. Interest rates mean nothing to Southeast Cash Balance plan.
Lump sum and then ask Fidelity to send you a monthly check with taxes taken out. It has worked for me for nine years.
Lump Sum.
Lump sum. The annuity has no cost of living adjustment..... If you pass away (or your spouse passes away if you take a survivor payout) the money is gone. Move the money over to an IRA and get it out of ATT's hands and work with a financial planner to figure out how to invest....you could even do an annuity outside of ATT control if you need the income.
No COLA, Take the Lump Sum. No brainer
One other consideration, is do you take the lump sum when you leave or wait until interest rates are lower (which translates into better IRS segment rate). FYI the IRS segment rate can have a negative impact on the lump sum received. In 2023 when I retired, the IRS segment rate for 2024 (which is established in NOV. of the prior year -2023) would have meant a 20% hit in my lump sum had I retired in 2024. Hence, I retired in 2023. As an example, if my lump sum was 500,000 in 2023, in 2024 it would have been 400,000. Do the math, pay attention to what the IRS segment rate is or may be projected to be.
Has little to do with the distrust of the current "Leadership" though that's perfectly valid if you feel that way.
Most respected financial advisors will advise to take the lump, and directly transfer to an IRA or existing 401K. It has to do with you ultimately having more control over your money, the potential to take that $$ and make a lot more with it via a lot of other investment options once in the IRA, the fact that the monthly annuity has no COLA, and that it ends when you "end".
Lump sum just makes better sense all around for most everyone.
lump into 401k. you can access if you stay until 55..
Lump sum. Estimate it because you may net out a better lump if you leave it sit until you’re 55. Do the pension estimator or call Fidelity.
You don’t have to decide right away. I moved mine because I suspect AT&T will go bankrupt and the pension fund is tied up in corporate real estate (the thousands of vacant towers in the non-hub cities) and that will eventually be adjusted downward. But you can hold off making a move until you’re ready to take. Create a new IRA account in Fidelity first, then fill out the move my pension form and use that new account name. You can move it anywhere. You can even invest in a franchise or rental property. Just don’t buy corporate real estate.
Lump sum all the way...less likely to get sc--wed than if you stay with the Annuity. Plus you'll have more control over it.