Does anyone know why our Pension payouts decrease so much. On average I have lost about 2-3K a month since I turned 55 and it is 3 years later my pension has decreased 150K. I heard it is because Verizon is using a mortality rate of 72 which is ridiculous in this age. If I would have waited until I was 62 to retire would have I lost another 150-200K??????
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“On average I have lost about 2-3K a month since I turned 55 and it is 3 years later my pension has decreased 150K.” - OP
Lost two to three thousand a month since turning 55 three years ago, decreasing pension by $150K?
3 years equals 36 months:
36 x $2K = $72K
36 x $3K = $108K
$150K / 36 months = $4,167 a month in losses, double your $2K a month estimate. I take it, math is not your strong suit?
I’ll make it simple. You’re losing $50,000 a year if, in three years, you’ve lost $150,000, as you claim.
Freeze or leave. It’s up to you.
OP, If your pension payout is going down “2-3K a month” since you turned 55, it’s easy to stop the hemorraging. Just freeze your pension.
Become a foreman. Not only do you not have to strenuously toil outside for extended periods at all hours of the day and night, in all sorts of weather, you get to sit in the warmth, at a desk, and not see your payout implode. Win, win, win.
Because the closer you get to dying and being on the wrong side of the dirt, the less that the company will have to pay you, since you will be dead. From 55 on, that number will go down because you get closer and closer to not being here anymore.
Interest rates were at historic 50 year lows. Essentially zero a few years ago and had no place to go but up. It's all relative though because even though you have less money you can get a higher return on that money since interest rates are higher on fixed-income assets if you're not satisfied with the lump Doewould look into taking the monthly annuity which interest rates does not change in fact that goes up x amount each month you stay at Verizon best of luck
OP... While the max lump you will ever get for "any given interest rate" is going to be the month you turn 55. The PBGC rate plays the biggest part. In your example above probably 35-40k of that $150k drop is because you are now 58 instead of 55. The lions share is likely because 3 yrs ago the PBGC rate was bouncing between 0.50 & 0.75% and now it is running between 1.25 and 1.50%. Remember Verizon adds 20% to the posted rates... and then figures your lump sum. So its likely $110k of that drop you see, is because the total rate "Verizon used" 3 yrs ago was 0.60% and now it may be around 1.80% (that's triple, & good for a pretty big Lump Sum bite)
Besides your age reducing your cash value interest rates also affect your cash value. When interest rates rise your cash value decreases. Interest rates are expected to rise, so assuming you are staying with Verizon these increased rates will decrease your cash value plus your monthly hit for age.
Your pension takes a mandatory hit each month after 55 for your age. Your pension also takes a huge monthly hit based on the pensions rate (PG rate) If the rate goes up .25% you lose approx 20-30,000 a month if your pension is over 500k. Your financial advisor should have explained this to you
there was a thread a couple of weeks ago with a good explanation for this. search for it.