A brief discussion of the recently published September 2022 minimum present value segment rates, and how they may impact the consideration of lump sum pension deferral for recent or prospective retirees.

We also address a few common misconceptions:

1. Segment Rates impact Pension Lump Sums — if after carefully considering your personal circumstances, you prefer the Monthly Annuity, then Segment Rates are generally a nonfactor.

2. A Monthly Annuity taken directly from the Pension is a very different transaction than a Private Annuity purchased from an insurance company Outside the Pension. A Private Annuity requires you to first claim the Lump Sum, which is impacted by Rates. Moreover, we have mixed feelings about Private Annuities in general, particularly in the current market environment.

3. Segment Rates change every month — the impact is not permanent for those planning to retire after 2023. The November 2022 Segment Rates generally impact Pension Lump Sums commenced in 2023. A Pension Lump Sum commenced in 2024 and beyond will likely use a different set of Rates, which could be higher or lower.

The decision to retire is a significant one that involves factors beyond the Pension Lump Sum. That said, we strongly encourage you to evaluate your personal situation carefully in the weeks ahead as the Segment Rate increases may negatively impact your Pension Lump Sum by an estimated 20-25% depending on your age and years of service.

Disclosure: The Retirement Network and AT&T are not affiliated in any way. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and many be invested into directly. Stock investing involves risk including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise and bonds are subject to availability and change in price. Government bonds and Treasury bills are guaranteed by the US. government as to the timely payment of principal and interest and, if held to maturity, offer a fixed rate of return and fixed principal value.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.