It’s of academic interest for us new employees as the pension benefits are much reduced and most of us will never spend an entire career …
… but just curious, if you started out let’s say 1990 and retired 2020 from chevron at say grade 25, what would typical pension lump sum be? (~2 MM I guess?)
@2ubt, I’d say that after 20 years, a $600k balance in your 401k would be average for someone in the 21 to 22 PSG paygrade and contributing about 5% of their salary and also getting the full company match. That is if you kept less than 10% of your holdings in CVX company stock and the reminder in US stock index funds.
Yes sorry, I was thinking total savings (other than pension)
Expat assignments don't affect the 401K nor the pension.
If you rephrase the question to "...if you started out let’s say 2008 and retired 2048 from Chevron at say grade 25...", the answer certainly won't be as impressive as those 1990/2020 Boomers, and that's assuming you're going to make it to 2048 with Chevron. Highly unlikely unless you become a solar panel Fellow, or maybe cow manure Fellow ?
What grade did you retire?
@2evl, I suppose that serves it's purpose as an average for those on this site, generally speaking but mine was significantly higher than that.
My guess is for people retiring grade 25 after 30 years of service:
401(k): $3.0 to $4.5 (depending on expat assignments)
Pension: $1.8 to $2.0
I have about $600K in my 401(k) after 20 years . Is this about average or on the low side?
How did we go from pension to 401k?
14 years, $875 in 401(k)
@2fms, Yes and No. If the retirees of the future retire with the future equivalent value of what today's retirees do then that's a fair statement, though "vast savings" will only be required if inflation continues for a significant period at it's current pace. And the "old guys" who rode the recent bull markets did very well with their investments, perhaps much better than we'll ever see for quite some time, their pension is their pension, smaller than most avid investor's portfolios, but larger than future pensions may be, considering the time value of money and the current trajectory of CVX. Many retirees invested in today's market have done "Vastly" better than their pensions, to borrow your term.
Approximately how much are people retiring with after 25 to 30 years of service? What is total worth of your 401k? I’ve worked for 15 years and have just under $750K.
If are you are smart with your 401K, Roth IRA and savings, you can do much better these days than the old guys did with their pension. People starting work now will retire with vast savings and never need to worry about money.
Yeah “us new employees” know the probabilities are high somewhere over the next decade or two we will get laid off. That’s no secret.
Do "us new employees" from CVX typically hang out on layoff sites instead of working? I guess at least you guys know where your future lies, lol.....
A caveat to your question - the answer is highly contingent on that starting year - 1990. After 30 years on that pension structure, you will do (did) very well for yourself. A big reason why so many Boomers were tripping over each other to EOI last year. Chevron "quietly" changed the pension structure in 2008, those hired after that date will have to work longer to make the same pension. Considering that very few of that demographic will last 30 years with one company, the question is almost moot for them.
Also folk who retired in 2020 hit a streak of high stock market returns right when they were at their peak of savings, this along with low interest rates and EOI made 2020 an unique opportunity to retire.
… don’t expect the same opportunity to recur in the near future.
Post 2008 pensions are much reduced and most of us young folk are unlikely to have 30 year careers.
So … enjoy your pensions, I don’t begrudge it, but understand our reality is ver different.
your question relates to way many so perfect alignment last year with severance and very low rates for pension lump sums. After ~30 years, my lump increased about $400k in last year (2019-2020) to very large amount. All in all, Chevron gets alot of whining on this board, but combo of good salaries, decent bonus program, 401k AND (AND!) Pension hard to beat....
Thanks for the replies.
I have great respect for the people who started in the oil patch during 85-90, mostly very hard working folk. They saw adversity early on but atleast ended their careers on a high note.
@Curious one, your estimate is pretty close. Started in '87 and EOI'd in 2016 with slightly less than your number. Keep in mind that the 3 segment interest rates play a significant role in the final lump sum figure so timing is everything.
@1wzw, your math is accurate. I was a 25 year employee who retired in 2006. My annual salary for the last 6 years was around $110k. My lump sum pension was $1.72MM. Lucky me that Chevron accepted my EOI and I left with an additional 1 year salary as a bonus. All that and we’re not even talking about the $2.2MM in my 401k.
So the calculation that was shown back in the day was one of someone who made $110k a year and work 25 years and retired with a pension of $1.8M
Now this changes with time as you want high interest while working and low interest at retirement lump sum. This was circa 2008 for this data.
You can work it out from the online pension documents - the formulii are all there. Highest 36 months average pay times a factor times years of service. For a lot of people, the lump is equivalent to about 4-6 times their annual salary plus bonus. Retiring at PSG30 is very different than retiring at PSG25.