Aflac Employees
Are you a current or former Aflac employee with 5 years of vested service?
If so, you’ve likely received a packet informing you about the termination of the Aflac Pension Plan. This can bring up many questions: What does this mean? How does it impact me? What actions should I take?
We’re here to break it down for you.
![Middle-aged woman with salt and pepper hair, brown eyes, and glasses smiles.](https://momentumwealth.us/wp-content/uploads/2024/06/Aflac-Pension-Plan-Woman-Glasses.png)
What do I need to know about my Aflac Pension?
Aflac Pension Plan Termination
The Aflac Pension Plan is being terminated, freezing all benefit formulas.
If you miss this deadline, you can still elect to receive your monthly benefits when you meet the usual age and service requirements of the Plan.
Would you like help with your Aflac pension?
BOOK A FREE 1-ON-1 AFLAC PENSION STRATEGY SESSION
What is a Pension?
A pension is a retirement plan that provides you with a steady income stream after you retire. Typically funded by employers, pensions are designed to ensure financial security throughout your retirement years. Your benefits are calculated based on factors like your salary history and years of service. You have the option to take a lump sum or receive monthly payments, which you can choose based on your financial needs and goals. Understanding your pension options is crucial for planning a secure and comfortable retirement.
![Middle-aged man smiling](https://momentumwealth.us/wp-content/uploads/2024/06/Aflac-Pension-Plan-Man.png)
Monthly Retirement Benefit Calculations
Your monthly retirement benefit under the Plan is calculated based on the following formula:
Average Monthly Compensation: This is calculated by taking your highest-paid 5 consecutive years within the last 10 years of Plan participation, divided by 60. Compensation earned after December 31, 2023, or after opting out in 2013, is not included.
Compensation Limits: Your pension-eligible compensation is capped annually by IRS limits. For example, the limits were $280,000 for 2019, $285,000 for 2020, $290,000 for 2021, $305,000 for 2022, and $330,000 for 2023
What are my options?
Special options and limitations apply for disability retirement and small benefit amounts ($7,000 or less).
Monthly Payments versus a Lump Sum
To determine whether taking monthly payments or a lump sum is better, you need to consider several factors:
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Investment Risk
If you take the lump sum, it needs to be invested wisely to achieve the expected return. Consider market risks and your investment strategy.
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Life Expectancy
If you live longer than expected, monthly payments may provide more financial security.
![](https://momentumwealth.us/wp-content/uploads/2024/06/Inflation.png)
Inflation
Monthly payments might not keep up with inflation unless they are specifically inflation-adjusted.
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Personal Financial Situation
Immediate financial needs, debt, and other financial goals can influence your decision.
Would you like help with your Aflac pension?
BOOK A FREE 1-ON-1 AFLAC PENSION STRATEGY SESSION
Consult a Financial Advisor for Your Aflac Pension
Navigating your Aflac pension options can be complex. Consulting with a financial advisor can help you analyze your specific situation and make well-informed decisions tailored to your needs.
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Knowing Which Way to Go with Your Aflac Pension
Deciding between monthly pension payments and a lump sum payout can be complex. Always consider consulting with a financial advisor to analyze your specific Aflac pension options and make the best-informed decision for your financial future.
Trustworthy Advisors to Guide You to Your Personal Goals
Momentum’s approach combines client-focused financial planning with the latest technology to simplify decisions and put you in control of your future. We work transparently with our clients, ensuring they understand the “why” behind every decision in their plans.