Thread regarding AT&T layoffs

It's not supervisors and it's not petty, it's a higher level and it's simply decision making. If you express interest at some point, you make that decision easier for them. Trust me, those are not easy decisions that they are required to make!

When are supervisors notified that you applied for the MVO? If it is s before 12.30 and you change your mind, entirely possible they will put you on the surplus list if they can, or make sure you get a bad raise and no individual bonus. There are enough petty people in supervisory roles who punish what they see as lack of loyalty. That's why most people don't take unpaid leave when it is offered.

@6kyh, you make interesting points early on but now I must ask, why do you feel that if you pull out of the MVO acceptance at the last minute that you would be putting yourself in line for a 2020
Involuntary Surplus, or even if they will offer future MVO’s....for all we know, this could be the last one.

And perhaps I interpreted your meaning wrong but it’s quite possible you’re not even in their sights to push out the door to begin with! We all know that T has witnessed a lot of talent walk out the door, and it’s quite possible their won’t be that freedom of choice any longer and cease MVO’s altogether. Seems most people have forgotten the past months of Outsourcing, they see a letter that tells them that if the MVO doesn’t meet expectations they will go to Involuntary methods....and they may well do that.
But now, since they have a number of people bypassing the MVO, and hoping to be cut (with expectations of the package & the unemployment check) what if they Outsource you first? T can afford to wait until late January a lot can in two month....make your choices wisely.

"If the segment rates for 11/19 remain the same as 10/19 my lump sum for 2020 will go up approx $85-87,000 it is possible the rates could drop a little further and the lump sum will go up even higher. 2020 may be a good time for anyone thinking of bailing "

Now you see the conundrum! MVO decision is due by 12/05/2019....However, locked in segment rates won't be out until 12/16/2019.

I believe the deadline to back out your decision is by 12/30/2019. Worst case by submitting your MVO acceptance, you put yourself on the surplus list in 2020.

"If the segment rates for 11/19 remain the same as 10/19 my lump sum for 2020 will go up approx $85-87,000 it is possible the rates could drop a little further and the lump sum will go up even higher. 2020 may be a good time for anyone thinking of bailing "

Now you see the conundrum! MVO decision is due by 12/05/2019....However, locked in segment rates won't be out until 12/16/2019.

I believe the deadline to back out your decision is by 12/30/2019. Worst case by submitting your MVO acceptance, you put yourself on the surplus list in 2020.

If the segment rates for 11/19 remain the same as 10/19 my lump sum for 2020 will go up approx $85-87,000 it is possible the rates could drop a little further and the lump sum will go up even higher. 2020 may be a good time for anyone thinking of bailing

I lost about 10% of pension lump sum on Jan 1 2019 due to the 4 rate increases by the Fed in 2018. I am hoping that the lump sum will go up 7-7.5% on Jan 1 due to the 3 rate decreases from the Fed in 2019. As a single man who was outsourced, I am going to take the lump sum so I have something to leave to my kids. WIll invest conservatively and hope it works out. I know the annuity is more over long term but I will still outlive my money.

"I only see a difference of about $1000.00 on my lump sum comparing the rates from 9/19 to 10/19 one poster said he had an increase of approx. 18% am I missing something? I am craft as well "

He was comparing November 2018 rates (used to calculate any distribution in 2019 and current in Fidelity's calculator) to November 2019 rates (used to calculate distributions in 2020). Also he was using October rates which may not be the same as the final November rate which has not come out yet.

The new rates for November (used for next years calculation) come out after the 2nd full week of December. It's likely they won't change much but we shall see! Fidelity's calculator will be updated by Dec 20 I believe.

have the new segments rates been announced yet? the only ones I find are for 10/19 - 2.01 3.06 and 3.65% I only see a difference of about $1000.00 on my lump sum comparing the rates from 9/19 to 10/19 one poster said he had an increase of approx. 18% am I missing something? I am craft as well

Correction.
plan 1) $500K in 401k and $500k lump sum. 2) $500k in 401k and Pension annuity of $2500

should read;
plan 1) $500k in 401k and Pension annuity of $2500

Sorry, no edits

Here are two plans using hypothetical numbers. keeping in mind for both retiring at 60 years of age and delaying SS until age 70, expenses of $4800 per month (including taxes). Both using a super conservative mix of 80/20 (Bonds/Stocks) mix that seeks to preserve capital.

There are much better tools for this available through Fidelity that incorporate inflation and a host of other variables (free for employee's). For these examples I'll use a simple savings withdrawal calculator. https://www.bankrate.com/calculators/savings/savings-withdrawal-calculator-tool.aspx
You can go to https://www.ssa.gov/myaccount/?gclid=CjwKCAiA8ejuBRAaEiwAn-iJ3rXT0mJCPUIfMv5ZTT6YKn3CmRQZG0-EtZrLrQ0081U7_mhGSGXnzBoCTrsQAvD_BwE and see your estimated benefits at 70 which increase 8% per year after age 67 to get the maximum benefit.

plan 1) $500K in 401k and $500k lump sum. 2) $500k in 401k and Pension annuity of $2500
401k = $500k invested in 80/20 mix making a conservative rate of 3.5% average rate over 10 years. to reach $4800 per month gross income we need to withdraw $2300 per month. leaving a balance of $378,000.00 at age 70.

Now we have income of $2500.00 pension plus $3200.00 Social security(number varies but using for example), for a total monthly income of $5700.00 (we get a raise and over halve is COLA protected).

Now we only need to withdraw the required minimum from our savings of $378000. using same conservative 80/20 mix at 3.5% with a withdrawal of about $14k per year for 25 years we are left with $337,405 in future dollars at age 95.

Plan 2) $500K in 401k and $500k Lump sum 80/20 mix at 3.5% average rate over 10 years. to reach $4800 per month gross income we need to withdraw $4800 per month. leaving a balance of $727,861 at age 70.

Now at age 70 we have the same $3200 SS benefit kicking in, we need to withdraw $2500.00 per month to get the same raise for a total of $5700 per month for the same 25 years. We end up at age 95 with a savings balance of $543,917.00 in future dollars.

Which is better? you decide! Most conservative plans historically have returned over 4% but it's very important to plan for the worst case. this is hypothetical and meant only to compare the two approaches to retirement Annuity vs Lump.

@3drs, not sure you’re technically right, or not....I keep most of my accounts with Fidelity, a few are outside, but I do know that if I were to transfer my mutual fund, currently with another house (at a .80% management fee) Fidelity would tack on a tenth %.

Now my CFP may not get the pocket change directly but I’m sure it goes a long way in his yearly review!

“Our Fidelity CFP recommended the Annuity, and am sure he gave up a nice chunk of commission on the Lump Sum by doing so.“

I use Fidelity and have a retirement planner there. As far as I know the don’t work on commission.

@eop

"Your financial advisor is correct–you will receive much more under the annuity".

You cannot definitively state this. It of course depends on the amount of $$ we're talking about, and the length of time those $$ would be invested in some good mutual funds.

I retired in January 2016 at 62.5 years of age and took the lump sum and moved it all over to Vanguard where I already had an account. Haven't and will not purchase an annuity. Haven't and will not hire anyone to advise me. Haven't earned one paycheck since I retired and I am worth more today than when everything was transferred over to Vanguard.

God, I don't miss the daily c-ap at AT&T!

@eop, a well said opinion, but add the factor of having a wider inheritance chain, besides the and you’ve nailed it....now not having a COLA (cost of living adjustment) is a very small factor to me as we have no kids, just flanking the Annuity with our Socials.

Our Fidelity CFP recommended the Annuity, and am sure he gave up a nice chunk of commission on the Lump Sum by doing so. Plus we gained the comfort of not dealing with surprises in the stock market in future days to come....we can deal with that.

All good problems to have

If you have the option for partial lump sum and pension annuity, it’s usually a very good option. Many comments point out that family and age circumstances vary widely. Another important factor not seen in this forum is whether or not you want flexibility to borrow for real estate. Not everyone owns a home outright, and the paper value of the house is not earning income. House values rise and fall, need repairs, or upgrades. In a down cycle investments may not perform, lose value, plus there is a double whammy if the house value goes down.

Pension annuity is considered as income by lenders. Worst case, you may need to take distributions monthly to qualify for a loan. Depending on age, there are those pesky tax consequences with IRA, 401k withdrawals. To be clear, either pension or withdrawals are the same taxable income.

Your financial advisor is correct–you will receive much more under the annuity. The only reason to take the lump sum is if you don't expect to live long, i.e., you have some serious medical condition.

Most financial advisors will tell you to take the lump sum, so that they can earn fees investing it for you.

You shouldn't make such a consequential decision based on opinions from unknowns, such as on this forum.

Do the math for both the annuity and the lump sum–there's quite a difference.

What are the new PPA segment rates? The last ones I could find were posted for 10/19 which were 3.01. 3.06 and 3.65 I’m assuming they’ve gone up

I am thinking of taking partial lump sum with a partial monthly annuity for guaranteed income, filing for social security for that income, and investing my 401k. Crunching numbers now. I will talk to advisor but this forum has great insight I’d like to hear your thoughts

I am facing this decision now as I recently retired after 40+ years. As noted by others here, the lump sum and the annuity pension both have advantages and disadvantages.

Annuity can be eroded by inflation and it doesn't allow you to leave an inheritance to anyone but spouse, but it also is guaranteed and may let you sleep more soundly at night. It also would allow you to more easily ignore market volatility with your other investments rather pulling out of the market at a bad time.

The lump sum will subject your money to market risk and since we are at all time highs that risk is high right now. It may help you fight inflation, but you must accept greater risk to do so.

Keep in mind that bonds are NOT a risk free investment.

I am not against lump sums. My wife, who also worked at T, took a lump sum a number of years ago and it has worked out well, but there were some scary moments along the way. Personally, I feel that if you have other assets (401s, IRAs) it may make the most sense to balance that with the guaranteed income of the annuity pension.

Also, you might want to consider managing your money yourself rather than giving a financial advisor 1% or more each year. Or at least consider going to a fee-only financial planner and doing your own implementation. Go to www.bogleheads.org (named after the late John Bogle, founder of Vanguard and inventor of the index fund) and read about the simple two or three fund portfolios. Even if you decide you need the help of a financial advisor, there is lots of good information on the site that will help you keep a close eye on your advisor.

Here is an article that you might be interested in.

https://www.kiplinger.com/article/retirement/T037-C032-S014-should-i-accept-a-lump-sum-pension-offer.html?rid=EML-retire&utm_source=retire&utm_medium=email&utm_campaign=20191121-retire&rmrecid=2818923399

My CHASE financial advisor recommends the lump, which is what I'll be doing when I leave in 2020 (forced FBO surplus with 20 years of service). If I choose, I can buy an annuity, haven't decided that yet. I'd rather have the lump sum to reinvest and a guaranteed to go to my kids when I pass (single mom).

@bkb, Managers' pension has been changed where they can all lump sum now.

The pension guarantee fund is only paid out at a 66%. So you take a big risk on the monthly pension if att ever files Bk. I would rather have control of my future with the lump sum.

I am craft, but would assume that when you go to the fidelity "estimate my pension by different dates" page, that a manager would have the same ability to enter the new PPA segment rates as I do.

At this month's PPA rates which just came out a couple of days ago ... lump sums will go up on average 15% in 2020

From 12/31/2019 to 01/01/2020 mine personally goes up 18.2% .... IN ONE DAY ... 18.2%

THE RATES THAT WILL COUNT FOR ALL OF 2020 are next month's and they likely will go up very little and possibly down even further. They will be posted on the IRS.GOV website or you can google Pensionsoft, which is a business software website and they publish them each month, immediately upon release, as well.

All I am suggesting is that if a manager ignores the MVO and stays until after 1 Jan 2020 maybe it is possible you make way more than taking the MVO just by pension increase alone and no MVO.

I realize that management pensions are possibly half annuity half lump or what have you and not the same as craft.

Taking the lump sum, sometime in 2H-2020. Based on the 3 Fed rate reductions, the lump sum could go up 7.5% on Jan 1. I am collecting it and putting in my rollover IRA at Fidelity. Will combine it with my 401K in that IRA and invest it conservatively. Yes, I know the market could blow up (2008) but I want it to be inherited by my kids. As a single parent, no spouse makes the lump decision easy.

I took the MVO in March 2015 and took the lump Doeaverage rate of return at Vanguard for the last three years with a 50% Stock/50% bond portfolio has been 7.6%. Reduce by about 1.8% for inflation and I net, pre-tax, about 5.8% which keeps me ahead of inflation.

Aside from the intelligent comments already made, do yourself a favor and search both Fidelity and Vanguards websites (and any other non-AT&T entity) for "annuity." They will explain much more than we can in a post.

Lastly, annuities tend to pay more up front than other investments and are attractive because of that. However, the math reveals, based upon a more typical historical 2.5% for inflation, you'd start falling behind after about 12.5 years. So you'd need to find another source of income to make up for the 2..5% you'll fall behind starting in the 13 year and continuing indefinitely.

My pension will be lump sum in an IRA. 1/4 in Apple, 1/4 in Google, 1/4 in Amazon, 1/4 in Microsoft. Those companies will be around for awhile.

Everybody is different on the way they invest their pension. It all depends on your choice. You can get lump sum first and then invest half in annuity from an investment company and put the another half in an IRA and manage the investment yourself. Give the whole lump sum to a financial advisors and let them manage it.

Lump sum or not?

Are you disciplined enough to keep it invested at a reasonable asset mix? (50/50, 40/60, 60/40?)

Not give it to annuity sellers who take half and then invest the rest?

One thing to consider, the annuity is a set amount which will never increase so if the cost of living increases your annuity will have the decreased buying power. You may not feel it in the first few years but down the road it will become noticeable.

Sorry gang, no immediate heirs just nieces to leave inheritance to....a T Annuity, flanked by two Social security checks feels right for us. The Pension Guaranty will protect that Annuity to over 6K monthly, more than enough, unless your salary was extremely high.

I respect the Lump Summers choice to take it, especially with the interest rate slashes this year. But if you plan to manage that Sum yourself, please think twice...."a fool and their money soon go different ways!"
That said, I choose not to worry about the gyrations of a stock market that has seen unprecedented upward climbs, thus an Annuity. And, though not an expert, I remember Japan going through a similar fast upward move, only to wallow in a Recession for over 10 years.

For the family people, Lump Sum makes sense, for us, ‘we’ll take the road less traveled.’

Fire your financial advisor. Seriously, if he thinks an annuity is covered under a pension provision he has no clue what he is talking about. As others have said, roll the lump sum into fidelity and invest it there.

Be in Control of your Financial Future. Interview Financial Advisors. Do realize that nothing comes free. Industry standard is up to 1.25% of Portfolio total. That is negotiable. When you investigate ways to grow your money you’ll see that Annuities can be bought at any amount but as stated earlier you can do much better. Annuities provide an X amount distributed to you monthly for life whether if controlled by the company or your portfolio. With a Lump Sum you get to manage it yourself through your Financial Advisor. Your investments grow but have fluctuations. You can set your personal draw down and if you allow the money to grow it gets really exciting. Ask friends what they plan or have done and if they’re happy. Do what is right for you. I lumped out and have fulfilled dreams through my earned pensions. My money is working for me and is growing. I’m fortunate, not rich but definitely not poor yet. I’m debt free. FICO score is at 816, was at 735 at date of surplus notification. I was just under $30k in cc debt. Retirement is happy times. 60yrs old 41yrs in the Company in both Craft and Management. Good luck.

Agreed on taking the lump sum. Then you’ll have it in your hands and have control.

Also agreed on cancelling their services where you can. I’m in the process of doing that myself. When I no longer got the employee discount, I was shocked at how much cheaper other providers were.

If you pass, your family gets nothing except your spouse. That is, if you take that reduced option. Take the lump and have Fidelity invest it in a safe bond type fund. Even their annuities will pass the money to your heirs. There fees are minimal.

The same Pension Guarantee fund that is backed by the government that is $20T+ in debt? I would trust AT&T before the government. But I trust myself more to manage my money. Take the lump sum and run.