Here's Where We PROVE Current And Retired Auto Company Employee's In Michigan Are INSANE.

When I read this I almost fell off the chair.

The crux of the story is that these General Motors retiree's (The one's featured here are 63 years old) are struggling with the decision to take a lump sum pension check from the company for $818,000 or continue with the HOPE that they will get a regular pension check of $4800 bucks per month FOR THE REST OF THEIR LIVES!

"NOVI, Mich. — For weeks, John and Kathy Matthews have agonized over the choice: accept $818,000 in a lump sum from General Motors to buy out Mr. Matthews’s pension or keep collecting a check of $4,854 a month.

John Matthews, center, talking with fellow retirees, said he was considering taking the buyout in part because it might allow him to give his children a larger inheritance. They have consulted nearly a dozen financial advisers, spent countless hours on the Internet, discussed scores of possible outcomes, and lost a ton of sleep. And with the deadline to decide on Friday, they still don’t know what they will do."

ARE YOU KIDDING ME?

They HONESTLY think that monthly check will still be coming if they survive twenty years from now?

My question is HOW out to lunch do you have to be living today in Michigan after what has happened over the last twenty years and actually STRUGGLING on whether you should take that check TODAY?

HELLO???? Are you F'n INSANE?????

If you can read, please read our words... TAKE THE MONEY NOW AND RUN AS FAST AS YOU CAN!!!!!

Chime in with YOUR thoughts...Are these people NUTS for even THINKING whether to take the check or keep taking monthly payments of $4800?

Honestly, I'm just amazed how out of touch people are with reality.


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opus - 7/19/2012 6:25:45 AM

+2 Boost

This is way below what I expect as far as commentary on this site.

800over - 7/21/2012 1:05:50 PM

+1 Boost

But he's also PROVEN he doesn't know what an apostrophe is.

kiroma - 7/19/2012 7:05:55 AM

+1 Boost

If they invested that money at 8% that would be about $65000.00 a year or about $5400.00 a month; though I expect they would have to pay income and FICA tax on the initial buyout.

I95SPEEDINGTICKETS - 7/19/2012 8:05:20 AM

0 Boost

To be honest, it is irrelevant what they would be getting per month if they invested the lump sum.

The key issue here is that I and millions of others are fairly sure that GM will not be around {At leat not in its current form} 10 years from now.

Chapter 11 filing would eliminate almost all of its previous financial commitments and free it up to restructure into a more efficient entity.

So for that couple to be flummoxed about taking the $818,000 USD lump sum.........

I guess they are ignorant of the financial situation GM is in.

pcar4evr - 7/19/2012 8:50:36 AM

+1 Boost

Traditionally most financial planners will not advise to take lump sum payouts. Lump sums tend to evaporate as "needs" (or wants) arise. That's why so many retirees have immediate annuities in their portfolio - a guaranteed source of income and a great excuse when their children ask to borrow money for grandkid's braces. And traditionally most advisors say don't take social security at age 62, because you get alot more per month if you want until 66 or even 70. But times are changing - now some advisors are telling retirees to grab their social security asap because who knows what the future brings with regard our governments ability to pay. For the same reason, the GM retirees should grab the 800K and put at least half of it in an immediate annuity with a super strong insurance company such as NY Life or Mass Mutual.

kiroma - 7/19/2012 10:24:06 AM

0 Boost

"To be honest, it is irrelevant what they would be getting per month if they invested the lump sum."

You're right, GM's long term future is by no means certain. If someone offered me an 800,000.00 buyout I'd be living on tropical island paying some native girl to rub sunscreen on my fat old carcass.

ThierryHenry14 - 7/19/2012 10:41:29 AM

+1 Boost

Definitely take the 818K. Any knowledgeable Financial Advisor will be able to make it last well into the next generation.

LexSucks - 7/19/2012 1:56:57 PM

0 Boost

Didn't the company initially agree to pay them the monthly pension (until they die) when they first hired the them?

HoustonMidtown - 7/19/2012 2:03:52 PM

+2 Boost

The 818,000 equals out to 14 years of the monthly payment....they better invest well (good luck) if they plan to live more than 14yrs if they take the lump sum

PUGPROUD - 7/19/2012 5:37:17 PM

0 Boost

Excuse me but a key element is being ignored...if you continue with monthly payments your GM pension will be transferred to Prudential on
an annuity basis. These retirees are betting on Prudential surviving for twenty years or more not GM if they choose to continue with monthly payments.

wins555 - 7/20/2012 12:33:41 AM

+1 Boost

This is a no brainer. Get the Money NOW! This goes for everyone who has a similar "predicament". Bottom line - Retired means enjoy the hell out of life. You cant enjoy life if you don't have money or living on a budget. IT IS THAT SIMPLE!

Eyecarehawaii - 7/24/2012 4:45:30 PM

+1 Boost

I wonder how many of those offering the suggestion to go for the lump sum are in the same age bracket as these people? It really comes down to a game of chance - how long will you live?

There are some important considerations besides whether GM will still be around in 14 years. What kind of quality of life do you want in your waning years? Do you have long-term care insurance or are you just hoping to drop dead while you still have a bit of money left? If you don't have long-term care insurance are you at least considering putting your assets in a trust so your long-term care costs will be paid for by others?

If you are in reasonably good health you probably can use the age your parents died as a guide. I know of people in their 90s who are doing better (from both a physical and mental standpoint) than others in their 60s. I suggest living each day like it's your last. Someday you'll be right.