Working at the aeronautical giant, Boeing comes with many benefits. These include tuition reimbursement and competitive salaries. However, the most important perk is the pension. It can provide for you and your spouse throughout your retirement years.
You can make investment choices on the My Retirement Income website or by calling the Boeing Retirement Service Center through Boeing TotalAccess. You can also find information about the VIP’s investment funds, including their objectives, strategies, fees, and performance.
Lump sum
When it comes time to retire from Boeing, engineers have two options: a lump sum or regular payments. The choice depends on many factors, including the individual’s tolerance for risk and life expectancy. For example, a lump sum can benefit someone in poor health but leave the money vulnerable to market losses.
Another important consideration is whether the engineer wants to pass on the money to heirs. In the case of a regular boeing pension payment, it cannot be passed on to non-spouse heirs. A lump sum, however, can be inherited by heirs and other family members.
The VIP allows participants to invest their accounts in various investment funds, including index funds tied to an intended retirement date. In addition, the VIP will enable employees to borrow against their balance subject to limits. For more information on lending rules and procedures, see the VIP Loan Guide on the My Retirement Income website or call the Boeing Retirement Service Center through Boeing TotalAccess.
Annuity
Boeing offers its employees many benefits, including tuition reimbursement and competitive salaries. However, the company’s most valuable perk is its pension plan. This yearly retirement benefit is often the deciding factor for many engineers considering early retirement.
The lump sum calculation for the pension plan is based on interest rates, which change each year. If the rates go up, the lump sum will decrease. Kempf estimates that a 1% rate increase cuts the lump sum by 7 – 12%.
As interest rates have risen, hundreds of local engineers are reconsidering retiring early. While some want to remain with the company for several more years, others will be forced to retire early if they opt for a lump sum payout. This looming financial impact is expected to cause a significant change to the company’s equity in its fourth quarter.
An annuity is a contract with an insurance company that provides steady income payments, typically beginning at retirement age.
Joint survivor
If you retire or terminate from the Boeing Controlled Group, you will be offered a lump sum pension payment for your vested benefit in the Boeing Pension Value Plan (PVP). The VIP account contains your credit-based benefit formula, interest credits, Heritage benefit, and Times Mirror indexing benefits, if any.
Calculating what lump sum is equivalent in actuarial terms to a lifetime of monthly checks varies depending on interest rates. If interest rates rise, the lump sum will decrease in value.
However, many retirees choose to take the lump sum. This decision requires careful financial analysis and due diligence. A retiree must also consider their ability to pass on heirs. A regular pension cannot be passed on to non-spouse heirs. This is why some people choose to take a lump sum pension payment and invest it to help supplement other sources of retirement income. They may even decide to continue working for several more years and then choose a lifetime stream of monthly checks.
Taxes
Boeing offers employees many benefits, including tuition reimbursement and competitive salaries. It also provides pensions, which are designed to provide income during retirement. These funds are subject to U.S. government rules, including the Employee Retirement Income Security Act, and are administered independently from other business operations. The pension plans are backed by the Pension Benefit Guaranty Corporation, which insures these benefits if the plan fails to meet its obligations.
Pensions aren’t the only source of retirement income but can be essential to a worker’s financial picture. Certain retirees desire to augment their income from other sources, such as Social Security and employer-matched 401(k) plans, with their pension. Others may wish to pass on some of their retirement money to heirs.
Members of the SPEEA union, representing engineers at Boeing, can receive their pension as a lump sum or as fixed-income monthly checks for life. About half of them have chosen the lump sum option in recent years. Interest rates are used to calculate the lump sum amount and are adjusted annually in November.
