At the beginning of the week, United Airlines offered the pilots voluntary extended leave. What does this mean to you? Especially if you’re retiring soon. If you’re not retiring, all this is saying is “Don’t come to work and we’ll pay you 50 hours in May, or if you want to leave for a longer period of time, 40 hours a month.” Frankly, if you’ve got a commute, you don’t like being around sick people – you just don’t want to come to work -that’s not a bad deal.
Well, what if you’re retiring? Really, the retirement decision is one about the pension; the lump sum. Let me be clear. It is our opinion at Avion Wealth that the annuity is completely safe. Not only is the pension plan relatively well-funded, but the PBGC coverage for the annuities that were frozen about a decade ago, or more now, is more than adequate to protect you. Only if you’re concerned about getting your lump sum – retaining a lump sum for purposes of maybe investing in a much devalued market in three months – only then should you be considering leaving early. And even that only applies to people retiring this year. I cannot in good conscience say, “lose a year of pay so that you can get a lump sum instead of an annuity” when the annuity is completely safe.
So what does this mean for people who are retiring? If you don’t care about the lump sum it’s the same deal. At 64 you probably shouldn’t be going to work. You shouldn’t be exposing yourself to people who are sick. That’s a value judgment, and you can take it or leave it. But if you want the pension lump sum, if it’s important to you for whatever reason, then get out now. Get out soon. Don’t let this be a reason to wait. If you have questions you’d like to discuss this on a one on one basis, reach out to me. We wish you all the best of flying success. And this too will pass. Thank you.