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How Skechers U.S.A. Employees Can Navigate the Impact of Inflation on Their Pension Choices

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Rising interest rates also play a large role in the decision of whether Skechers U.S.A. employees should take their pension as an annuity or a one-time lump sum payment. As inflation continues to rise, the Fed has responded by gradually increasing interest rates, which decreases the value of future pension payments as well as the lump sum value. This is because the future pension payments are worth less today as the dollar devalues and the higher investment return drives the total present value of the payments down. To show this mathematically, imagine an individual with pension payments of $48,000 annually ($4,000 monthly), a 20-year time horizon, and a 5% interest rate

The present value of all of these payments is worth $598,186, which should roughly be the value of the lump sum payment. With a single percentage increase in interest rates from 5% to 6%, the new present value of the payments is reduced to $550,556, just under an 8% decrease over the old present value. Evidently, rising interest rates negatively affect the present value of future payments so given Federal Reserve Chairman Jerome Powell’s mention of 2-3 more interest rate hikes this year, the decision of whether to take a lump sum now or later could have a big impact on your retirement from Skechers U.S.A..

'Taking your pension as a lump sum and knowing how to manage your funds to last for your retirement requires hard work.'

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In practicality, taking your pension as a lump sum and knowing how to manage your funds to last for your years of retirement from Skechers U.S.A. requires hard work. Figuring out how much to withdraw, when to withdraw, and how much you can spend each year are just a few of the many decisions that are needed to be thought out in order to maximize the benefit of taking your pension as a lump sum. If you don’t take the time to think out these decisions, you could find yourself running out of funds during your years of retirement from Skechers U.S.A..

For our Skechers U.S.A. clients who would prefer the safety of a guaranteed stream of income for the rest of their lives, taking the annuity over the lump sum may be the better option for you. With taking your pension as an annuity though, there is no certainty that the company paying your pension will remain in business for the duration of your retirement so you run the risk of receiving smaller pension payments from the PBGC (Pension Benefit Guaranty Corporation) in the event that Skechers U.S.A. goes under. Both options have their pros and cons and in the end up to you to decide which suits your personal financial situation and lifestyle.

If you are interested in more information about this topic, view our e-book here: https://retirekit.theretirementgroup.com/effects-of-inflation-e-brochure

What type of retirement plan does Skechers U.S.A. offer to its employees?

Skechers U.S.A. offers a 401(k) retirement savings plan to its employees.

Is there a company match for contributions made to the 401(k) plan at Skechers U.S.A.?

Yes, Skechers U.S.A. provides a company match for eligible employee contributions to the 401(k) plan.

How can employees at Skechers U.S.A. enroll in the 401(k) plan?

Employees at Skechers U.S.A. can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.

What is the minimum age requirement to participate in the Skechers U.S.A. 401(k) plan?

The minimum age requirement to participate in the Skechers U.S.A. 401(k) plan is 21 years old.

How much can employees contribute to their 401(k) plans at Skechers U.S.A.?

Employees at Skechers U.S.A. can contribute up to the IRS limit for 401(k) contributions, which is adjusted annually.

Does Skechers U.S.A. offer any investment options within the 401(k) plan?

Yes, Skechers U.S.A. offers a variety of investment options within the 401(k) plan, including mutual funds and target-date funds.

Can employees at Skechers U.S.A. take loans against their 401(k) savings?

Yes, Skechers U.S.A. allows employees to take loans against their 401(k) savings under certain conditions.

What happens to the 401(k) plan if an employee leaves Skechers U.S.A.?

If an employee leaves Skechers U.S.A., they have several options for their 401(k) plan, including rolling it over to another retirement account or cashing it out.

Are there any fees associated with the Skechers U.S.A. 401(k) plan?

Yes, there may be administrative fees associated with the Skechers U.S.A. 401(k) plan, which are disclosed in the plan documents.

How often can employees at Skechers U.S.A. change their contribution amounts to the 401(k) plan?

Employees at Skechers U.S.A. can change their contribution amounts to the 401(k) plan at specified times, typically during open enrollment periods.