My husband is a 47 year Sears employee. He was retiring THIS MONTH. He was scheduled to receive his LUMP SUM pension. NO MORE. They pulled ALL unprocessed pension payouts. We were promised numerous times in writing that everything was fine. Now? $600 a month. 😪 It sickens me to the heart that the vile creatures that have run the company into the ground and ruined the lives of tens of thousands are using our money to pay themselves millions.
11 replies (most recent on top)
As a retiree your fixed expenses should be covered via Social security and an annuity ... and some savings in a CD or savings account. An annuity is not always a bad thing. The stock market has been volatile the last couple of years, there are no guarantees there. You can decline the survivor benefit and back it up with a term life or whole life policy. I am guessing the 600 a month accounts for the survivor benefit you selected. In some cases that could be close to 200 a month. I also couldn't take the lump sum, but after calculating some budget numbers it is working out for me now. I already had a life insurance policy close to the full lump sum number... I spoke to my financial advisers and that's what we did. By declining the survivor I squeezed out as much as I could from the annuity. My beneficiary will get the life insurance policy money tax free. Take the lemon Sears gave you and make lemon-aide. The Sears annuity pays close to 6.5 percent of the lump sum amount. You should get back all your lump sum money in about 14 years of getting the monthly checks. At first I was really upset but after calculating and talking to experts it isn't all that bad.
I agree that eliminating our option for the lump sum has been unfair, especially after my 42 years. But I do recognize that it was because the federal regulations due to the bankruptcy was the reason for the change. What the real shame is that our pension amounts were so low... that Sears stopped giving them to begin with after all those years... and the fact that Eddie has tried, and continues to try, to get the responsibility of the pension obligations off his back. Some of us juggle our personal finances and would use the lump sum to benefit us. Some of us recognize that the annuity Sears offers limits you to only 1 beneficiary - and after that its gone, whereas getting it into another retirement vehicle allows for as many beneficiaries as you wish. So do not judge some of our sorrows about the lump sum. Eddie of course has made sure he will be fine no matter what happens.
Do I feel sorry for someone who believed a company that hasn't posted a profit in 7 years would "do the right thing" and pay their pension even though once a company goes bankrupt that do not have to? No, no I don't feel sorry at all for this s---er. Common sense would tell you when a sink is sinking you look for the life boats, not look for the captain to tell you everything is fine.
Truly sorry for what you are going through, that's awful!
@ijbd your point is stupid. Ever wonder why you hardly see octogenarians on the streets? It's not because they don't exist or don't have money.
My point was that the older they are and the smaller the monthly payment that the pension determined is actuarially equivalent to the lump sum they had been expecting, the smaller that lump sum amount would have been, and most retirees do not come out ahead by taking the lump sum.
Most retirees do not want to think about their expected lifetimes (which keep getting longer and longer, while guaranteed lifetime income sources like pensions become scarcer) and/or do not understand or want to try to understand the math. Unless you have been diagnosed with a serious health problem likely to kill you within a few years, or are already so wealthy that you will be fine without the pension no matter what happens, the only reasons to feel so strongly that you wanted the lump sum are not financially sound, as I explained in my previous reply but some people apparently didn't want to bother to understand.
https://www.aarp.org/work/retirement-planning/info-2014/retirees-pension-plan-change.html
" Retiree advocates worry more about lump sums than annuities.
A pensioner receiving a lump sum may make bad investments or use the funds to erase current debts, leaving little or no money for later years, advocates say. Retirees may also be pressured to take a lump sum by children who can inherit cash but not pensions, or by financial advisers wanting to earn fees for managing the money.
"It's almost never better for someone to take a lump sum and give up the monthly benefits," unless you aren't likely to live long, says Nancy Hwa, with the Pension Rights Center in Washington, D.C.
Jerry Rosin, 57, of Menasha, Wisconsin, is among 10,000 former Kimberly-Clark employees offered cash to exit their pensions in 2012. "At first blush, it looked kind of tempting," says Rosin. After crunching the numbers, he decided to stick with the pension. "
@1ylj Gee, I don't know, how can a late 60s-70s year old person who was probably expecting a six figure lump sum payment suddenly have it turned to $600 can possibly have it ruin their financial plans that was probably years in the planning. It must take great financial genius to figure that one out.
I don't know how this 'ruined' you, unless you planned too heavily on spending the lump sum payout much faster than it should have been spent for a sustainable long-term retirement. Whatever amount you were expecting to receive would have no more than, and usually less than, the net present value of the expected total monthly payouts over the average lifespan of a Sears retiree. The only reasons to take a lump sum payout are to reinvest it yourself in the stock market at your own risk of outliving your withdrawal rate, or to spend it all more rapidly than the monthly payouts would allow, or because of not understanding the security provided by the Pension Benefit Guaranty Corp.
47 years netted him 600 a month?
thank you for sharing your story you made my day
#me too. Any class action lawyers out there want to attack Eddie's wallet?