Know of any pulling the plug soon before they start working for free?
51 replies (most recent on top)
@9jtqm that's because you have no gonads & are shooting blanks so no one cares......
I have lots of clean clothes, so I prefer pi----g into the wind. Personal choice.
If your bank accounts have liquidity then the annuity is a very smart choice.
I chose the lifetime 100% J&S annuity over the lump sum. Why? Personal choice based on my wants and needs. I already have a handsome retirement nest egg under management, absolutely no debts or mortgage balance, social security rolling in every month and bank accounts with enough liquidity. The key thing is to DIVERSIFY your investments and sources of income. All this of course along with LIVING DEBT FREE and WITHIN YOUR MEANS.
@2vgu, All that tells me is you didn't talk to Fidelity.......................................
@6hiq, That's because you do not have a pair, you only have an empty sack. When you grow a pair you may also get a clue.
But what if they’re spouse decided to remarry???
Annuity. = parishes when you parish and or you spouse depending on the plan
Lump sum invested correctly = lives on for your remaining family and loved ones
Ask any financial planner.
As for which has more yearly potential, chevron tells you what the numbers in the annuity are based on as it’s the money the plan is detracted per year if taken early. How much can you grow a lump sum every year, that about the only variable and that’s up to how aggressive you want to invest.
@6hjm: Can we assume from your evasive answer that you can not think up even one plausible scenario for when the annuity might provide more total lifetime payments than a wisely invested lump?
@6bmc, If you can't figure that out on your own you have no business being in charge of yours or anyone else's savings. Do yourself a favor. Use an advisor.
You're welcome.
When you children to swabbing, perhaps we can return to my previous question. “Under what scenarios is the annuity likely to provide better life time earning than a broadly invested lump?” Still waiting for a reply!
Nothing worse than a jealous triggered person who can't read or write English.
No one cares enough to try to decipher your gibberish. Yawn.
Only an average chevron employee who has made poor financial decisions for chevron for the last 20-30 years would choose an annuity and believe it’s a good choice.
@5lnr..." 8 figure net worth...". The only way you could get to that level of affluence is either relative ability, or you are a former Chevron manager. If the latter, you're not telling us about all the other secret managerial benefits that Chevron provides its annointed ones.
I have a guaranteed annuity that I receive every month. I also have an 8 figure net worth in various investment vehicles. I have never been called d.u.m.b by any of the people that I give financial advice to, I can't imagine why not. Maybe it's actually ME who's d.u.m.b, and all those who post on thelayoff.com website, are just really really smart investment and financial geniuses.
The only time an annuity makes any sense at all is as longevity insurance. You can buy one at age 75 or 80 with a fabulous payout (11% annual for example) that will pay you handsomely every year you live. If you live to be 100 it's a super deal if inflation is low. An annuity any earlier is d-mb (even if the fabulous lump sum were not available) because the payout is low and inflation tends to destroy it.
“equal in value to the one time payment, over time”… maybe, if you live a long time AND the person who took the lump put it under their mattress. If the person with the lump invested those moneys, and market returns were even half historic long-term averages, then the annuity payments will likely never equal those generated by the invested lump even if you live forever!
“ I haven't really given it much thought”… say no more! There are almost no specific cases that support your annuity choice. If you asked your advisors “is the Chevron pension a good annuity”, then they correctly said yes. If you asked “is an annuity a good idea relative to investing the lump, then your advisors should have said no! For those that think a “guaranteed” annuity salary is somehow safer, the strongest anti-annuity case was the Carter years, when inflation almost hit 15% but the market (after a brief stall) returned nearly 30%. Those that had pensions were is very bad shape, whereas those that had invested retirement savings did quite well.
I haven't really given it much thought , but those that I talked to, including Financial Advisors, all said that the Chevron pension annuity was one of the best available and equal in value to the one time payment, over time.
4fxg: Let’s hear your example where the annuity will likely generate more life time earning than a lump invested in the broad market … we will wait … so that we can all learn from your financial wizardry!
@4rso So you didn't have any real math or examples to use so you just made up some. OK, Gotcha. Dat's shor a fine argument you got there son, Yes Sirreee!!!!!
I agree, if people like the annuity security it is strickly there choice.
The annuity choice is strictly an emotional decision, not financial.
I love the argument that I have so many other investments that I can afford to make a very bad choice with my pension moneys: Really? Why not make good choices with all your investments? As others have noted the annuity payments are likely to decrease in value significantly over time due to inflation, but even ignoring that for simplicity the numbers are obviously against taking the annuity. The annuity currently “pays out ” 5-6% of the lump a year (it is easy to look up your specific estimates at the HR site). Sounds a reasonable deal for guaranteed income until you realize that for the first 17-19 years the annuity is just slowly returning your money (the lump, which you could have had at the beginning)… so retire at 65 and with the annuity you finally get your lump amount by 82 (or 84 depending on your specific numbers). At that rate you will need to live until 99 to get twice the lump in annuity payments (good luck with that, but some will live that long). If you are one of the very lucky, you will have gotten a 100% return on your annuity invested lump (in 34 years), so an annual return of about 3%. Die younger than 99 and your rate of return will be less. Die before 82 and you will never even get out the value of your lump, so you rate of return on annuity invested lump would be negative. Invest the lump in a broadly diversified portfolio for 17 years while you spend other moneys and there is a very good chance the lump will double (6% return). You can play with other scenarios (add inflation, assume you need to spend the lump immediately at retirement, ect.), but the agreement for the annuity only get worse.
@2hgc, Yes, that is correct. And from the indicators on the posts here of the level of financial literacy held by commentators it is not recommended for anyone who frequents this site regularly.
@4jhc "if you have other money, and no need for it?"
Not the sharpest tool in the shed. Try to rephrase your sarcasm a bit more competently, then others won't cry so hard at your apparent illiteracy on top of the financial ignorance.
If you have a lot of other money to the point you don’t want your pension, the annuity is a good choice. It is guaranteed as long as Chevron is around and inflation is low. A great option if you have other money and no need for it.
@3blj, For me, and countless others like me, the annuity, if selected, would be "certain income" as you just described in your example. The large percentage of my income is investment income outside of my 401k and not SS, which is a relatively small number. So whether your investments are real estate or not is immaterial. I think the point being made by that one example is the annuity or lump sum is but a small percentage of overall retirement savings/income, which it should be if you are a disciplined investor who started early. I think these discussions and highly opinionated lump-sum bias rants are generated by workers who rely too heavily on their one CVX pension and nothing else. Those with a lot less time at one company mostly don't look at it that way.
Does anyone know where the "layoffs" section of this forum is? I heard there is a part of this site where layoff related topics are discussed.
historic low rates big reason I EOI in Dec 2020, of course along with full year's severance. Thankful for my timing. In terms of annuities, my experience honestly is those who feared having to manage own lump sum would say "oh, they are giving me $90k a year, I'll settle for that"...often same that would leave all 401k in CVX stock out of fear of again having to manage, even though easy total market or SP500 index funds show solid returns and no brain work needed. Annuity also as noted pays nothing if unfortunate case of you/spouse dying (i.e. no inhertitance for family). Lump sum invested in index funds way to go...
The lump sum is calculated assuming you id--tically invest it in government bonds yielding close to current rates. If rates rise, a smaller lump sum will give the same income stream. It is all theoretical as we all invest our lumps in index funds with fabulous long term returns.
Can someone explain to me like i'm five what interest rates have to do with the pension? Why do increasing interest rates cause a lower lump sum?
I only know of one person where it was a wise decision to take the annuity. That person had outside real estate investments, and they viewed the annuity as certain income. For the rest of us, that 'certain income' is social security (yes, it is much less than the annuity). The part about the annuity losing out to inflation in the long term should be troubling to anyone considering it.
At 8% inflation you annuity is cut in half in less than a decade. In 20 years it could be cut by 80%, which is essentially gone altogether. It is one of the worst annuity deals out there.
Anyone who takes the annuity is going to lose money since there isn’t a cost of living increase. And in 20 years the annuity payment will be worth at least half as much. Take the lump sum and invest the money! At least getting 4% interest per year is better than losing money!!
The annuity was a horrible choice when inflation was low. Now that it is raging, the annuity is like flush8ng your pension down the toilet.
Welcome back Annuity Troll! My Lump Sum (along with the rest of my portfolio) has doubled in the past 4 years. Your annuity, not so good and getting worse!
I happen to know a ton of people who retired from Chevron and took the 100% jo--t survivor annuity and are living the dream. Not saying that either one is good or bad but I have no idea what you guys are posting about on this thread or where you get your info. Whatever you do, don't trust this site as a reliable source. Just a bit of advice.
The Fidelity hack was pulling your leg. In all the years and millions of posts on this board, only one rube went for the annuity. We call him the Popcorn Guy. He is think8ng about a Walmart job now that inflation is nearing 10%.
@2cco, I do have quite the young and attractive wife who will undoubtedly live much longer than me, barring any unforeseen circumstances.
When I talked to an advisor at Fidelity I was surprised that over half of his clients my age said that they took an annuity. Don't know if that means anything but it conflicts with what others are reporting on this "layoffs site".