I got laid off October 2018. According to the XeroxBenefits website, the earliest I can take my pension is May 1 of this year. I have two choices...I could leave it in there....(but is it wise?) or pull it out and roll it over into an IRA. Does anyone have any sage advice? My 401k is already pulled out into a self-managed IRA. Can Xerox (il)legally dip their hand in this cookie jar? Not sure what they could do.
Thoughts, comments, suggestions welcome.
Please
To Be or noth to be
What did financial planner recommend ?
I’m curious
for 3vdx - The larger employer PBGC fund would be in good shape right now if Congress did not keep raiding the fund to plug other budgetary holes. In addition, over the last year or two, Congress has been trying to raid the large employer PBGC fund to fill in the very large funding hole the small employer PBGC fund has. So in summary...
Plan for the worst - Icahn & co. sell-off the most valuable parts of Xerox leaving a failed company buried by debt, which sends RIGP to the PBGC and you only get a portion of your expected retirement income
and hope for the best
To "old timer", there's a simple reason I chose lump sum vs annuity, and it wasn't financial performance. I am a single parent. When I die, the annuity ends. Children cannot inherit, only spouses, which I confirmed with HR. So, having rolled my pension over to an IRA, if I get hit by lightning next week, my adult children will at least get some benefit from all that unpaid overtime I put in at Xerox.
I don't understand why PBGC is not being mentioned when discussing the safety of our pensions. I know their multiemployer insurance program is in danger of insolvency, but the single employer program is okay. Also, I doubt very much that Congress will allow either program to fail. Also, I've found that the lump sum payout will vastly underperform the annuity in the long run.
Thank-you ANTHONY, et. al. who responded. It is crystal clear to me now and I have an appointment with a financial planner this coming Thursday. I miss all my buds at Xerox and wish you all well. Hope to see some familiar faces in Wegman's and Dunkin' Donuts!
The hardest part about reading advice about pensions is knowing that you weren’t elligible for pension because you aren’t over 20 years w them. It’s just a pain being reminder how f’d up planning for retirement has become and how employers continue to shift all of the burden of retirement to employee. Ugh.
I was run out of Xerox afterv 44 years of service, I was able to take all my money out of Xerox and give it to someone who knows what they are doing. This was the best decision I ever made, do not leave your money with Xerox. I do talk to other people who left Xerox and they all say the same thing.
In addition to the excellent advice "nei" provides, I would add that, aside from Xerox's scary struggles right now, it becomes a math analysis. If memory serves (I did not keep a copy of the SPD pdf, unfortunately), the pension fund is invested moderate-to-conservative, and did not grow at the same rate as my 401K. That fact, combined with potential risk, made it an easy decision for me to roll over my pension to an IRA when I got laid off. Rolling over then leaves you (and a financial planner, if you get one) in charge of choosing your investment risk tolerance, not Xerox.
I'm with "nei", I sleep easier at night knowing I got my pension money out of Xerox. If you want the security of a fixed payment, you could always buy an annuity (again, working with a financial planner).
Moving the 401K is actually a more challenging decision for me - I've left it at Xerox for now.
Speak to a financial planner !
Have values ready of payout per month and the amount of the lump payment .
Worth the 250$ per hour they charge as you’ll get a clear picture .
Can’t take from cookie jar but right now they’re at 80% funded which means that for every dollar promised per month they currently have enough to cover 80% of that amount .
They top up every year to make sure it stays close to 80% but if they stop topping up it’ll be lower going forward .
Leaving pension in usually is the no risk choice but as Xerox is in an industry that’s changing fast 80 % might be the most you’ll get as won’t be able to continue funding .
Pay 250$ an hour , have your values and let them punch in figures to give you a clearer picture !
Don’t skimp on this decision as your retirement could be affected big time .
Benefits , spouse, children are all and need to be factored in .
Don’t go to a financial institution but a neutral planner that will simply guide you as what’s best for you .
We decided to pull out as 80 % not sure will get higher and don’t want to be watching the news every day to see how Xerox is doing . Still I’ll be watching the news on my investments but I’ll simply rather play it safe and possibly get less per month etc but at least it’s under my mattress not theirs .
We don’t know how long we will live is the big unknown , pension is forever but possibly reduced amounts if funding starts dropping .
Please honestly seek advice from a planner , you’ll see a clearer picture with your options .
Very tough decision and worth every penny for professional advice .
Sleepless 3 months for my wife and I and now after looking under every rock are comfortable with our decision.
Remember neutral financial planner as in a bank etc they’ll want your money and will sometimes promise the moon .
I’m using 4% interestreturn which is a modest return but that’s me .
Pay the professional advice is the only thing I can really say , worth every penny .
Get 2 opinions if need so but don’t make a decision blindly .