Does anyone know the formula to calculate what the lumpsum would be after the interest rate reset ?
I have IRS segment rates for June and the mortality rate for 2023 just need the formula to complete the calculations. Thanks
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You have to have your last day worked be November 30th, with a benefit commencement date of December 1st.
"Absolutely not!!!! Because you are only allowed to retire on the 1st of a month. Will cost you a lot if you make that mistake."
THANK YOU!
So, retiring December 1st is latest date to retire and get favorable lump sum calculation.
Absolutely not!!!! Because you are only allowed to retire on the 1st of a month. Will cost you a lot if you make that mistake.
"For calendar year 2022, Ford will use the Aug 2021 int rate. Beginning Jan 2023, all commenced benefits will rely on the int rate set by the fed as of Aug 2022."
Does this mean one can retire December 30, 2022 and begin receiving benefits December 31, 2022 and get the favorable lump sum rate?
$200k hit to lump sum! Here's hoping they offer another voluntary package ;-)
HRA $ will likely bridge you to Medicare
Depending on when you were hired you either get a lump sum or a monthly sum.
Damn health insurance is one thing that makes me think twice.
I’m just glad I jumped on last voluntary package. A career of this BS got old. And it won’t stop.
If offered pkg, go happily and DO NOT LOOK BACK!
Eye opening calculations eh?
Especially if you realize you would be in most cases working for free if you stayed another two years. Decline in lump sum / salary
I calculated using a spreadsheet. Without taking any reduction in life expectancy I would see 20.6% reduction in the lump sum based on on June segment rates. If I assume 1 year reduction in life expectancy, my lump sum would go down by 22%.
Agree. A good rule of thumb is to assume that a 1 point increase in interest rates equates to roughly a 10% decrease in the lump sum.
This is it, from nesc, for every 1% increase in fed rate, take $10,000 off every 100k in your lump sum. This is what nesc said.
Formula is fuzzy math and NESC will not share it. However some current ICE coworkers reverse engineered it and came close. June rates are about a 20% reduction. July rates are a bit higher so safe to assume at least this much.
The IRS Tax Rates used to calculate pensions-
https://www.irs.gov/retirement-plans/minimum-present-value-segment-rates
Compare the rates for Aug21 to the ones recently published for June22.
The rates for June22 compare to the rates from Sept09/Oct09/Nov09 (recessionary time).
Several years ago, many saw an increase in the value of their lump sum pension when calculated with Aug20 rates- 6 months into the pandemic. Who knows what the Aug22 rates will be, but the trend this year suggests a major drop in the lump sum value...
I am looking for the same thing. SS supplement makes it hard to calculate the lump sum
Ford uses the Aug interest rate set by the Fed in the preceding year. For calendar year 2022, Ford will use the Aug 2021 int rate. Beginning Jan 2023, all commenced benefits will rely on the int rate set by the fed as of Aug 2022.