Thread regarding Chevron Corp. layoffs

Honestly, I don't understand the annuity takers crying about how terrified they are of investing and market fluctuations. If you work and invest 30 years, you can invest another 30 while retired. What's the difference? My old man is nearly 90 and he still raves about this stock and that. The market is extremely predictable over long time periods. You can't lose.

1gkrb, Yes, I agree with that sentiment. It's like "wake-up pay". I look forward to receiving mine although it will be a few years. I can't believe that there are people on here who lack the common sense and math skills to realize the "actuarily equivalent" nature of it. It really makes no difference. It boils down to the same amount. And if your lifestyle depends on it, you have much bigger problems than you can solve here on this layoffs site - lol!

It is obvious from the comments below that many of you lump sum fanboys neither have skill nor experience investing with an aggressive portfolio. That has been confirmed by the returns you have quoted during the largest bull run of most of out lifetimes. You guys stick to your safe index funds and such and take your lumps and put it in those safe investments that you speak of. With the fear, anxiety and desperation that you have and always had with the market and with finances in general, it's no wonder that many of you fear the annuity and have experienced poor returns up to this point, limiting your options. If you can't afford to pay, you cannot play!

-1lgnn: Although after ten years you might have gotten half the lump returned to you in annuity payments, you would have had to pay taxes on those disbursements so you would have received less than that to invest. You could have rolled the lump into a tax deferred IRA from the start, where gains on the lump would have continued to compound tax deferred. Comparing investment returns on a well placed lump with investing annuity payments will always a loser for the annuity holders. The only reason to get an annuity is market fear, so it is unlikely someone receiving annuity payments is then investing them aggressively... or at least that would make little financial sense.

I smell BS. After ten years the annuity payments would have returned only half the value of the lump. To have doubled that amount in an investment (to now have the value of the lump returned as claimed) would have required compounded annual returns on the amount trickling in from the annuity of about 4x in those ten years. Impossible unless these moneys were invested very aggressively (and also with lots of luck). The person who claims to have pulled this off is so risk advise that they took an annuity? Only in the fantasy land of anonymous postings! You know your position is untenable when you have the lie. If you’re happy you took the annuity then good, but save the BS.

Yes the market would have doubled the lump invested over the last ten years, but just as importantly if there was a crash tomorrow with the lump in a conservative mix you would be in a position to rebalance and recover much fast following the crash. With the annuity you will have to wait while it trickles back in over years to rebuild your nut. The annuity is a s---ers bet, but take it if it makes you feel better and more protected.

I would say you were very unfortunate and unwise not to have opted for and invested the lump sum. Any modest gain you made on the annuity is but a fraction what you would have today had you invested the lump. The market more than doubled since 2008 so even blindly picking up a passive index fund you would have done quite well. Your annuity payments, in the mean time, have been eroded by inflation of up to 3% annually.

I completely agree with @1kuxx. I did my analysis about a year before retiring. For my financial situation, the J&S Chevron annuity worked out to be my preferred choice of pension. I have enough retirement savings to retire on already. The pension was just icing on the top. I looked at this way, most employees in the United States don’t even have the good fortune to retire on a pension. Most need to rely on the 401k and IRA retirement savings alone, and Social Security. I had the good fortune of working for Chevron for 27 years and I built up a good nest egg in my 401k. My pension annuity pays me about 90% of the expenses I need in retirement. My house was paid off before I retired and I carry no other fixed debt. I pay cash as I go. The annuity provides me a baseline. It’s a guaranteed source of income. Social Security next year will more than meet my needed expenses and will allow me and wife to travel more often. Those employees contemplating retirement should carefully consider the annuity if they have sufficient savings already. The annuity and social security should serve as guaranteed fixed income streams so you don’t have to rely exclusively on the ebb and flows of market returns. Enjoy your retirement while you have your health with peace of mind. Cheers!

I did the math with both conservative and non-conservative assumptions and ended up deciding upon the annuity about 10 years back. I find it has served me very well and has proven to be more than enough, even without Social Security. My purchasing power hasn't diminished much. It's a personal decision and may not be the same for everyone. I like the idea of getting a paycheck every month until I'm gone. It's a nice feeling. Don't underestimate that.

-1kuln, aka popcorn boy, you are a good example of what 1jmst is referring too, one who can't imagine that the educated world, posting here, disagrees with you. You can't believe others are so successful while you are miserable. They call your type of posts illiterate drivel. Take $20 and go buy yourself an education.

-1kwix That’s because half the posts on this thread are your own made up bull***t. LMAO popcorn boy. You just keep pretending your big time on this anonymous site, because everywhere else you’re a nonstarter.

-1jerk: ok, good. I hope it works out great. That said a few years in inflation has not changed your payout much. It will be only after a few decades in, when inflation may (or may not) have changed the real value of your annuity payments that you might feel the pinch. The annuity takers will say that this is also the time frame that the lumpers might be seeing their mistake if their investment returns fall short of their expectations. That analysis is fair enough, there is no free ride and all choices come with different types of risk. That’s life. Personally my cost benefit/ risk assessment of the lump combined with all my other assets suggests more safety investing the lump with the rest as part of a balanced portfolio. Everyone gets to make their own assessment and live with their own choice. Freedom. Its great. I have no idea how this topic led to 300 posts of unpleasantness. If you wish to comment, a simple statement of your reasoning might help others. All the snipping helps no one.

@1izlo, I did what you advised. I thought about it. As a matter of fact, my decision was made about 4 years before I retired. I took my pension as the 100% joint & survivor annuity. It’s been 3 years since I retired and I haven’t once regretted the decision.

One who is so dreadfully paralyzed with fear that the savings invested in their well-balanced, expertly laid out, well proportioned portfolio will not last them through the rest of their lives and have plenty left over may want to consider taking a lump sum for their pension. You have a better chance of finally being able to afford those things that you have deeply desired your entire life that other's can already afford if you keep all of your money at risk in the market and take that chance. Many of us are fortunate and can already afford those things now, today! That good fortune comes from making good financial decisions early in life and throughout one's entire career. That's appalling that one would need to work that long just to get to that point in their golden years. You may win, you may lose. If you lose, you will end up worse off than you are and much worse off than those who have a lot invested in balanced, diversified portfolio, and can afford a great deal on a lifetime pension annuity when presented with one. It's a shame that one would need to even consider staying 100% invested with every dollar at a point when they should have won the game, should be living large and on auto-pilot. In any event - Good luck to everyone!

“take the 100% joint/survivor annuity without thinking twice about it“... well that’s your mistake. No one is so well off that they should make a multimillion dollar investment choice without thinking about it. Those that investigate the numbers find that with very high probability you will receive a LOT more by taking the lump and investing it wisely. Not by taking wild gambles, but rather just by investing in it in a plain vanilla broadly-diversified index fund(s). Getting a little annuity check every month might be conforming for some used budgeting their life to a regular paycheck, but in this case, with current interest rates, it is clearly the poorer financial choice.

I would never be so rich as to make the financial mistake of the annuity. One doesn't accumulate and preserve wealth by making bad decisions or eschewing normal risk for decades out of simple fear. That is the path to mediocrity and regret, but one which is best for those who are happy to trade it for peace of mind.

1icwn, Yes, GOT IT! - when we want to know about double-wides and dreaming about fancy cars, we'll come talk to you.

1ioax, the annuity is neither fake nor a security blanket, it is earned income, but I think you know that and just insist on being the little prick that you are, and I doubt you even work for Chevron. Either way, you should take a few courses and get a financial education, maybe work a few years yourself and get out of the "simple life" that you are enslaved to having to rely on market returns to support even that meager life- poor planning lol!

1ioax, Those who did well in life and were successful investors can not only afford not to work, live a luxurious lifestyle, but also take the 100% joint/survivor annuity without thinking twice about it and without a care in the world. And if we lose that, no big deal, because many of us have 4 to 5 times that much coming in from other investments and resources. Don't feel bad about those more successful than you who made good decisions early in life and have better options and wealth. Enjoy your "simple needs" and the minimalist approach. And in case you need a way out, an escape from that low-cost simple lifestyle, maybe the stock market will do you a favor. Maybe not. Some of us do not have to rely on that, we will be living large either way, with or without the pension. C'est la vie!

@1hfzp, Correct. You need to have been a savvy investor with at least a basic amount of financial expertise throughout your entire working and saving career to afford and enjoy the luxury of an annuity. It is not for these types on here who have just discovered the stock market during the internet age and in a bull market. Those types need to take the lump sum, roll the dice, and hope all ends well. Others can afford to sit back and enjoy the fruits of their labor and financially wise decision making.

Might be better to work until you no longer need fake security blankets like an annuity to feel secure. I for one can handle any conceivable market fluctuations and remain in good shape. It is not (just) because I have a solid portfolio after 35 years with Chevron, but also because I have relatively simple needs to be happy. The last thing I would do is forfeited a slice of my investment moneys to someone else to “guarantee” me mediocre returns.

You definitely need a huge savings (or wealthy inlaws) to "afford" to make up for the inflation losses of the annuity. It gets to be thousands per month pretty quickly.

If you only speak “English” then you should spell storey (not story) correctly numbnuts.

-1gacx: we have heard your storey also. You got sooo much money it is coming out your a-- and are such a sophisticated investor that you dare only consider annuities and money markets. People with lots of money know how to access risk relative to potential returns. You can pretend this anonymous poster is somehow short on saving all you like, but I think you are seeing a reflection of yourself in the mirror. Sorry my butthurt friend, but we all know you’re the loser.

@1ghdo You aren't kidding. I call it "wake up pay." As long as I wake up on the 1st of every month, I am getting PAID!!!

pensions rock - they make retirement planning easy

nothing like a steady stream of income month after month after month after...

1gjif, Yes, we've read your posts here countless times before. You are such a great investor that you are 100% sure that your investments will beat anything presented. Yet you still don't have enough of a nest egg built up to be able to afford a guaranteed income stream at the best rates available and not blink an eye. Keep trying. Maybe you'll convince some newcomers and naive children who are first-timers here. Save us the snappy fake comeback that you are rich as sin. That one's worn out too. Yawn...........

Wonderful logic you all have. When choosing between the lump sum and the annuity you choose the annuity because you think it is better than some other annuity. Well, I would have to agree, if you are not going to invest and you want an annuity, the best choice between the lump sum and the annuity is the annuity. If you require guaranteed income, the annuity is your best choice. If you want guaranteed devaluation due to inflation, again the annuity fits best.

The only true point you make is if you want an annuity, Chevron’s pension is a good deal. My reply is simply what id--t thinks its a good idea to get any annuity at today’s interest rates. Your cost for voiding one type is risk is very high!

1efpo, Not sure what point you're trying to make, but no one is claiming that they can predict the future. or the future of market, in fact, just the opposite. The value of the annuity is not "expected" it is researched from online quotes from actual real-life banking institutions that are prepared to sell you one today! You give them your age, data, etc. That's the value, the true market value. Why, you ask? Because that's what the market dictates. You get a better value getting it directly from Chevron. We challenge you to present a way to get comparable guaranteed returns with the lump Doem sure that if you simply give us the GUARANTEED income source that can compare many, many, many on this site would LOVE to invest in it, In fact, they and all retirees across the nation, will be breaking your door down to tell us this secret that only you must know!

But, just between you and me, pal...... I won't hold my breath..............

Your words:

"Comparing your expected annuity payments over your projected life span to the original lump value is simply a false comparison! Your projected annuity payments span decades, and the idea that you can expect no investment returns over those decades is just nonsense."

I was having a little bit of concern about someone like you knowing what to do with a lump sum, an amount that someone like you has obviously never fathomed having in your lifetime, 1fusf, but your comments reassured me. The NPV of the lump sum, is less than that of the annuity, per current markets. I know because I personally checked the cost of identical annuities. Also, what the worst (or best) 35 year investing often has returned is irrelevant to Sequence of Returns Risks.. The economic history of the US and you have not been properly acquainted, apparently. We forgive you and welcome your irrational optimism, believe us, it's very much welcome on this site. I was originally thinking that you will be fine, but after careful observation of your comments, I still have the serious question and concern - Does 1fusf have the mental capacity of a chimpanzee? I can see now that it's highly doubtful, based on your comments.

The NPV of the annuity payments and the NPV of the lump sum are, by definition, the same using the CVX interest rate assumption. The interest rate is how the lump sum is calculated - it is the NPV of the annuity payments between when you start them and when you are expected to die (single). It is an extremely extremely conservative discount rate assumption, like 4%. A chimpanzee can put the lump sum in an index fund and get more than 50% higher return. The worst 35 year investing EVER returned more than 6% CAGR. Thus, a chimp will have significantly higher NPV with the lump than the annuity. A person who invests in money market funds or CDs at their local savings and loan may be better of with the annuity.

-1ezeb: Comparing your expected annuity payments over your projected life span to the original lump value is simply a false comparison! Your projected annuity payments span decades, and the idea that you can expect no investment returns over those decades is just nonsense.

@1ejzk, Relax buddy. I knew that too, just looked past that and posted some advise that everyone can use. I’m not in the 75% of the posts on this site that leave BS or pay attention to it.

1evry, Relax, buddy. I'm pretty sure he knows that. What you failed to point out, more importantly is the BS numbers that he put forth and scammed you with. Unless he has a special pension calculation which 100% of the other CVX employees are not offered, or he knows without a doubt that he will die much earlier than the predicted age from current mortality tables his numbers, like 75% of the posts on this site, are 100% unadulterated BS, lol.

@1eiqs, I’ll let you in on something. Please don’t ever forget this. Net Present Value (NPV) is a calculated value in PRESENT day terms, as the acronym specifies. The NPV result your calculation gave you may be correct, but that only tells you your value TODAY. News flash - There are many years left in your life and that NPV could turn out out to mean something else down the road, a Net PREVIOUS Value. Be careful with your assumptions and play it wise. Diversify your investments and fixed income streams. I learned that one a long time ago and enjoy a worry-free retirement today.

1eakt, NPV is Net Present Value. For the lump sum that's today's value. What "Investment Returns" are you referring to? As stated below, and numerous times prior, the NPV for most is better with the annuity. And also recognized by many who keep stating the obvious as if they just discovered the stock market (I'm sure many just did), it's possible to get better returns investing, but not guaranteed, and the risk level is completely different so it is by no one's stretched imagination a fair comparison.

1eakt, Not sure who you are replying to, but do you normally keep your investments under a rock or mattress? That doesn't seem very prudent. I imagine that you don't have much to begin with, so it probably doesn't matter much. I suggest a broad sector Vanguard or Schwab ETF, at a minimum, if you are a naive beginner and need advice, which seems like the case. There are also some very good I-shares ETF's which trade free in your Fidelity account, assuming you have one.

Funny I am getting an add on this site for a fix annuity...”rates up to 4.3%”! By that bar, the Chevron annuity pension is a very good deal ... at least compared to other annuities.

I assume in these calculation you are assuming no investment returns on the lump, you get it and just place it under a rock.