Finance Yahoo had an article recently which stated that 1,000 Ford employees were better off retiring to receive higher pension payouts than to remain working. We are sure that the problem isn’t isolated to Ford and we know of other people in other industries that have faced a similar dilemma.
The lump sum for 2023, according to the Ford memo, would decrease by an estimated 20% to 25% relative to the lump sum values that Ford employees would get if they took it in 2022.
For example, if someone is looking at a $500,000 lump sum payout in 2022, the loss in 2023 could be in the range of $100,000 to $125,000.
Finance Yahoo
Would you continue working if it meant taking a $100,000 hit to your retirement bucket? We wouldn’t and this type of situation will exacerbate future labor shortages as millions of boomers hit retirement age and leave the labor force over the next 10 years.
There are also penalties for earning income after taking social security which results in lowering social security income if receiving income from a job so this disincentives workers that may want to come back to the labor force altogether.
The agency will withhold $1 in Social Security retirement benefits for every $2 earned above the lower exempt amount. It will withhold $1 in benefits for every $3 earned above the higher exempt amount.
Fool.com
The next decade will be a total mess for labor and the general workforce. The best thing to do is to plan accordingly, stay tuned, stay profitable and stay solvent…