With interest rates on the rise, many Chevron employees are asking themselves “Am I working for free?”.
If retirement is on the horizon for you, choosing the right month to commence benefits could be trickier than it seems.
We break down how segment rates work, how they affect your lump-sum payment and why the timing of your retirement is so important.
We have over 20 years of experience helping Chevron employees navigate their retirement and get the most out of their benefits package.
The IRS has posted updated Min Present Value Segment Rates for the month of August 2022. They are as follows:
Increase of 0.12
Decrease of 0.05
Decrease of 0.04
Based on the 3-month average that the CRP uses ( June, July, August) the Segment Rates for November 2022 retirement are
Increase of 0.187
Increase of 0.010
The newly published IRS rates will be factored into the 3-month average used for the CRP lump sum calculation for Chevron employees who wish to take the CRP lump sum in November 2022.
As an example, for a married client age 59, from January 2015 to January 2016, we saw the 1st Segment rise 0.36, the 2nd Segment rise 0.27 and the 3rd Segment rise 0.17; this resulted in a decrease in the lump sum value of ~2.5%. Due to the individual nature of the actual CRP lump sum calculation, you would need to run the estimator for November 2022 to determine the impact to your value.
The IRS publishes a table of Minimum Present Value Segment Rates here: https://www.irs.gov/Retirement-Plans/Minimum-Present-Value-Segment-Rates
To view past Segment Rates, use the dropdown menu below.
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