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Retire On Purpose, With Purpose

 
When it comes to managing your retirement, a small mistake can cause a major loss of capital. That is why it's important to speak with a financial advisor who is familiar with your Company's benefits. Schedule a call today..  
 
 
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AT&T Pensions Would Drop About 22% If Rates Were Calculated Today

Sep 20, 2022 1:33:32 PM
written by The Retirement Group

AT&T recently sent a memo to their employees warning them about the impending pension drop. AT&T y estimates employees will lose between 15% - 30% on their lump-sum value. Employees would lose a significant amount on their pension lump-sums if the lump-sum was calculated based on September's interest rates. The segment rates, used by AT&T, track the U.S. 10 Year Treasury rate, which means that as the U.S. 10 year Treasury rate increases, so do the segment rates. That is why the U.S. 10 Year Treasury rate is a great indicator of the IRS segment rates. The 10 Year Treasury rate has increased by over 2% since November 2021. When interest rates move up or down, an AT&T employee’s pension lump-sum amount will move in an inverse direction.  A 1% increase in interest rates typically means a 10% decrease in lump-sum value. Our calculations show that lump-sums would drop by approximately 22% if AT&T used the current interest rates. This means that an employee with a $1,000,000 lump-sum would lose around $220,000, not including the interest they would have earned on the original $1,000,000. If rates continue to rise, this lump-sum loss will be substantially larger by the end of the year. The exact percentage an employee loses on their lump-sum will change depending on an employee's age, years of service, hire date, job title, and a few other factors. 


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posted in Financial Planning, Pension, AT&T

Interest Rates Are Soaring in 2022, What Will this Mean for Future Lump Sums at Southern California Edison?

Jul 5, 2022 2:16:26 PM
written by Kevin Won of The Retirement Group

Could Lump-Sums for Grandfathered Southern California Edison employees be on the decline? The September interest rates, which Southern California Edison uses to determine lump sum values for everyone who retires in 2022 were released in October. We now have new monthly segment rates which show that interest rates are continuing to rise. Rates have been steadily increasing over the past year and with the recent announcement of next year's interest rates we are very likely to see a reduction in lump-sum values for Southern California Edison employees who retire in 2023. Southern California Edison interest rates decreased in 2020 causing 2021 lump sums to hit record highs. Based on the current trend of interest rates and monetary policy announcements it is likely that rates seen in 2020 will be the lowest for the foreseeable future - meaning that the Lump Sum Values for Southern California Edison employees who retired in 2021 will likely be the highest for the foreseeable future. When interest rates move up or down, your pension lump sum amount will move in an inverse relationship. 


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posted in Pension, Interest rates, SEC, Southern California Edison

Up-To-Date Market Week

Jun 28, 2022 2:43:54 PM
written by The Retirement Group

The Markets (as of market close September 30, 2022)

Before reviewing your company 401(k) plan, check out how the market can affect your retirement. Wall Street ended a very tepid month of September on a downswing. Each of the benchmark indexes listed here lost value last week, as investors continued to worry about the impact the Federal Reserve policies will have on the economy. The 0.3% increase in the August personal consumption expenditures price index certainly didn't help support the possibility of an easing of the aggressive rate-hike tightening employed by the Fed. While stock values dipped, long-term bond prices also declined last week. With prices waning, bond yields rose higher. The 10-year Treasury yield jumped 25 basis points last week. Crude oil prices edged up, while the dollar slipped lower. Gold prices rose about $20.00 per ounce.



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posted in Financial Planning, Lump Sum, Pension

ExxonMobil Q4 Lump-Sum Payments Likely to Fall, Based on Rising Rates

Jun 23, 2022 11:50:45 AM
written by The Retirement Group

Interest rates are trending upward, and if this trend continues ExxonMobil lump-sum payments will drop again in the fourth quarter of this year. The IRS has recently released the Segment rates for the month of May, recorded at: 3.23% / 4.59% / 4.69%. May's segment rates saw an increase of about 0.3% (in the second segment), which is a substantial jump for a single month.  This ongoing trend upward looks to be an early indicator of bad news for ExxonMobil employees opting for a lump-sum in the future.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, ExxonMobil, Inflation

Q4 ConocoPhillips Lump Sum Payments Likely to Fall, With Interest Rates Continuing to Rise

Jun 23, 2022 11:46:12 AM
written by The Retirement Group

ConocoPhillips employees considering the lump sum option on their pension payment may have an opportunity to take advantage of lower interest rates in Q3 2022. With Q4 projecting to have higher rates, retiring during Q3 may be the last opportunity to avoid a reduced lump-sum. May's segment rates were just released and they are 3.23%/4.59%/4.69%. These rates increased by about 0.3% (in the second segment) since April, which is a very large increase for a single month. 

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posted in Pension, Interest rates, ConocoPhillips, Inflation

KP Lump Sum Payments Falling, With Interest Rates Continuing to Rise

Jun 23, 2022 10:55:42 AM
written by The Retirement Group

Many KP employees who are waiting to commence their pension lump-sums, are now seeing a significant decrease in their value. New segment rates have been released and there was a 0.3% increase in the second segment over the previous month. The second segment is the most impactful so if you have a pension of $1,000,000 you could see a reduction of about $30,000 simply by commencing your benefit in July as opposed to June. This is because when KP employees elect the month they would like to begin their pension, KP looks back two months to calculate the rates for the pension disbursement. When these interest rates move up or down, your lump sum amount will move in an inverse direction, so if interest rates increase, your lump sum amount will decrease and vice versa. Through the pandemic, interest rates dropped dramatically which greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since then this trend has shifted, as interest rates have been increasing rapidly, causing a large reduction in pension lump-sum values.


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posted in Pension, Interest rates, Inflation, KP

Chevron Lump Sums Experiencing Serious Drops, as Interest Rates Continue to Soar

Jun 22, 2022 2:04:36 PM
written by The Retirement Group

Many Chevron employees who are waiting to commence their pension lump-sums, will now see a significant decrease in their value. With short, medium, and long-term rates rising significantly over the last month, the higher average rates will result in lower lump-sums for those retiring in August of 2022. This is because when Chevron employees elect the month they would like to begin their pension, Chevron looks back at the third, fourth, and fifth months' rates to calculate the pension disbursement. When these interest rates move up or down, your lump sum amount will move in an inverse direction, so if interest rates increase, your lump sum amount will decrease and vice versa.

Through the pandemic, interest rates dropped dramatically which greatly increased many lump sum payments. This trend culminated in record lows for individuals who commenced their benefits in December of 2020. However, since then this trend has shifted, as interest rates have been increasing quickly, there has been a large reduction in pension lump-sum values.


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posted in Pension, Interest rates, Chevron, Inflation

Handling Market Volatility with Confidence

Jun 4, 2022 11:45:00 AM
written by The Retirement Group

Investing in 2019 was fairly easy. The Standard & Poor’s 500 Index (S&P) returned nearly 28% for the year with only a few bumps along the way. Today, however, we're faced with a very different market. More and more uncertainties are seemingly hitting the headlines every day, from the global spread of COVID-19 and its potentially wide-spread economic impact, to a historically low Treasury note, and plummeting oil demand, resulting in a 13% drop in the S&P year-to-date, substantially wiping out gains from the past 12 months.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning

ExxonMobil Lump-Sum Payments Likely to Decline in Q4 Based on Current Trajectory

May 25, 2022 9:56:18 AM
written by The Retirement Group

Interest rates are trending upward, and if this trend continues ExxonMobil lump-sum payments will drop again in the fourth quarter of this year. The IRS has recently released the Segment rates for the month of April, recorded at: 3.00% / 4.22% / 4.17%. April's segment rates saw an increase of about 0.5% (in the second segment), which is a substantial jump for a single month.  This ongoing trend upward looks to be an early indicator of bad news for ExxonMobil employees opting for a lump-sum in the future.


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posted in Financial Planning, Lump Sum, Pension, Retirement Planning, ExxonMobil, Inflation

ConocoPhillips Lump Sum Payments Likely to Decrease in Q4 With Rates Continuing to Increase

May 25, 2022 9:52:28 AM
written by The Retirement Group

ConocoPhillips employees considering the lump sum option on their pension payment may have an opportunity to take advantage of lower interest rates in Q2 2022. With higher interest rates taking effect in Q3, and Q4 projecting to have even higher rates, retiring during Q2 may be the last opportunity to avoid a reduced lump-sum. April's segment rates were just released and they are 3.00%/4.22%/4.17%. These rates increased by about 0.5% (in the second segment) since March, which is a very large increase for a single month. 

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posted in Pension, Interest rates, ConocoPhillips, Inflation

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Information regarding the lump-sum payout may or may not apply to specific employees based on factors such as mergers, acquisitions, years of service, age, or the date an employee was hired.