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.
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
The Retirement Group
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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 July 29, 2022)
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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
KP Lump Sum Payments Drop, As Interest Rates, Continue to Climb
May 24, 2022 12:37:38 PM
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 0.5% 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 $50,000 simply by commencing your benefit in June as opposed to May. 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-sums values.
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posted in Pension, Interest rates, Inflation, KP