The November interest rates, which AT&T uses to determine lump sum values for everyone who retires in 2022 will be released in mid December. Rates increased in November and if that trend holds we could see a reduction in lump-sum values for AT&T employees who retire in 2022. If you decide to stay past December 31st, 2022, you could see a significant reduction in your lump sum. Interest rates are trending upward, and when interest rates rise, lump sums fall. If you believe that interest rates in November 2021 will be higher than November 2020 (Which is likely) you may want to consider retiring before January 1st, 2022. This will allow you to lock in the medical coverage and take advantage of a lower interest rate, which will increase your lump-sum amount.
AT&T announced that there will be significant changes made to retiree’s healthcare benefits. Traditionally, when a retiree is eligible for Medicare (For most people this is at age 65), their primary health insurance is switched from the AT&T plan to Medicare.
As many of you know those who retired after January, 1st 2021 no longer receive a healthcare reimbursement account from AT&T which helps cover things like out-of-pocket costs, incremental coverage, or supplemental coverage.
According to AT&T’s Summary Plan description, those who retired before January 1st 2021 received an HRA credit of $2,700 for themselves and $1,500 for an eligible dependent. This adds up to a total HRA credit of $4,200 per year. For a couple with a 20-year life expectancy, the HRA credit could account for $84,000 in total.**
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In addition to the benefits already lost, AT&T announced that they will eliminate all medical coverage for retirees who leave the company on or after January 1st 2022, which is approaching quickly. AT&T will no longer pay for a portion of the retiree’s monthly premium for medical or dental (This does not apply to all employees, but if you live in Texas or another state where AT&T is prominent, you should check with the benefits office for specific information about your benefits). AT&T’s group medical and dental will still be available at the full cost of coverage. If you’re considering leaving AT&T in the next few years it is worth considering whether or not it would be worthwhile to move up your retirement date and retain these benefits.
|"For a couple with a 20 year life expectancy the HRA credit could account for $84,000 in total."**||
Healthcare is not the only benefit being reduced after January 1st, 2022. Life insurance coverage will also be diminished. Starting in 2022 life insurance will be paid a flat rate of $15,000 as opposed to a percentage of income. AT&T will also offer a one-time opportunity to purchase supplemental life insurance during annual enrollment as we near the end of 2021. The supplemental life insurance will be in addition to what the company already pays for and will be available at a lower rate than the individual life insurance product market.
**$84,000 figure based an eligible former employee and their eligible dependent receiving full HRA credit for 20 years.
Securities through FSC Securities Corporation, member FINRA/SIPC and investment advisory services offered through The Retirement Group, LLC, a registered investment advisor not affiliated with FSC Securities Corporation or AT&T. Office of Supervisor Jurisdiction: 5414 Oberlin Dr #220, San Diego CA 92121. 800900-5867
AT&T Summary Plan Description. AT&T, 2018, p. 18.
AT&T Summary Plan Description HRA. AT&T, 2018, pp. 10, 11