Friday, July 31, 2009

30-Year Treasury Yield Falls – Good News Heading Into August?

The yield on the 30-yr. Treasury fell today to 4.31%. Although this yield is still higher than May’s monthly average of 4.23%, it was an encouraging way to close the month of July as we head to the all-important month of August. Why is August so important? Because August’s monthly average yield will be the GATT Rate that is used in Verizon Associate pension calculations for October-November-December retirements.

As many of you have seen, your lump sum amounts declined drastically from June to July. The August rate will give us tremendous insight into what the drop-off could be from September to October. So, for those of you debating whether to accept the September 12th EISP offer, it is very important that you pay close attention to the yield on the 30-year Treasury throughout the month of August. We will be reporting that information right here on the blog, and we’re also standing by to help you.

Please call Harris Financial at (800) 281-3980 or (804) 526-0544, and ask for Carl, Jamie, or Steve.

Thursday, July 30, 2009

30-Year Treasury (GATT Rate) at 4.45%

The yield on the 30-year Treasury Bond is 4.45% as of today. Although the rate has declined in the past few trading sessions, the rate of 4.45% still represents an increase of 22 basis points over May’s rate of 4.23%. The change of the rate from 3.59% to 4.23% resulted in a significant reduction in lump sum pension amounts, and unfortunately, as of now, that trend is continuing. This is something to watch very closely if you are debating whether to accept the September 12th EISP offer from Verizon. Please call Harris Financial Group at (800) 281-3980 or (804) 526-0544 with any questions about how this may affect your retirement.

Tuesday, July 28, 2009

Verizon Rumors Heating Up

We're starting to hear strong rumors of an EISP offer with an off-payroll date September 12th. The difference in retiring in September vs. October could be very significant from a lump sum standpoint, as the GATT rate seems to be on the rise.

Verizon reported its 2nd Quarter earnings today and plans to cut about 8,000 jobs during the second half of 2009.

Thursday, July 23, 2009

30-year Treasury Yield Rises to 4.6%

Things are heading in the wrong direction for those of you planning to retire in the 4th quarter of 2009. We now have just 6 trading days left until the August rate begins it's month-long average, and the rate has headed higher over the last few days. Stay tuned!

Video Link to Jamie Cox's Appearance Today on CNBC

Link to Jamie Cox's appearance on CNBC.

Wednesday, July 22, 2009

Mid-Term AFR Rises for August

The Treasury has published the Mid-Term Applicable Federal Rate for August. The rate now stands at 2.80%, up slightly from 2.76%.

This rate is significant because it is used in the calculation of IRS 72(t) payments. In this context, a rising rate generally allows someone to set a higher initial 72(t) withdrawal amount, provided it is prudent and suitable to do so.

Here is a link to the IRS Revenue Ruling listing the new rate.

For more information on how this rate might impact you, please call Harris Financial Group at (800) 281-3980.

Monday, July 20, 2009

Jamie Cox to Appear on CNBC on July 23rd

Harris Financial's Jamie Cox will appear on the CNBC television show "Power Lunch" on Thursday, July 23rd at approximately 12:05pm. We will post a link to the interview as soon as it becomes available.

30-yr Treasury Yield at 4.466%

Another relatively calm day. Just 9 more trading days until August, when it will be really important to watch the rate.

Friday, July 17, 2009

GATT Rate Ends the Week at 4.53%

Not a good week for those of you hoping the rate comes back down for the month of August. There's still time for that to happen, and we'll watch closely next week.

The rate is now almost 100 basis points (1%) higher than it was for June 27th retirees, potentially resulting in huge reductions in lump sum amounts.

Thursday, July 16, 2009

GATT Rate at 4.45% Today

A fairly calm day for the 30-year Treasury Bond today saw the yield drop slightly to 4.45%.

Wednesday, July 15, 2009

Yikes! GATT Rate Moving Up Again

With August now just 2 weeks away, it is becoming more important to watch the GATT Rate closely. There were signs of optimism last week as the rate (which is the yield on the 30-year Treasury Bond) was down around 4.2% -- roughly where it was for the month of May.

But as of this morning, the rate is working its way back up to around 4.45%. This is potentially bad news for those of you thinking about retiring in the 4th Quarter of 2009. Remember, the higher the rate goes, the lower your lump sum pension payment will likely be.

We will closely monitor and report any movement in the GATT Rate over the next month. Please contact us if you would like some help figuring out your particular situation.

Tuesday, July 14, 2009

June 27th Retirees Should Be Eligible to Rollover 401(k)

For most June 27th retirees, the 401(k) system should now show your status as "retired." If you need help rolling over your 401(k) or need to access some of your 401(k) funds, please call Jamie, Carl, or Steve at Harris Financial Group.

Jim Cramer's Take on the Verizon/Frontier Deal

Here's an article summing up Jim Cramer's comments last night on CNBC about the Verizon/Frontier deal. The article includes a video link.

Jamie Cox has recently conducted some seminars in West Virginia on this very topic. For more information, feel free to contact us.

Heading Upward Again

30-year Treasury yield back up to about 4.33% today.

Monday, July 13, 2009

GATT Rate Stuck at 4.20%

As of noon today, the yield on the 30-year Treasury Bond was almost unchanged at 4.20%.

Friday, July 10, 2009

Consumer Sentiment and Earnings Angst Spurs Buying in Treasuries--Pushing Yields Lower

Weaker than expected earnings estimates from Chevron and a lower read on consumer sentiment sent investors fleeing for Treasuries pushing yields lower. Although this is a bad thing for the market, it is a potentially positive development for GATT rate calculations going into August.

Thursday, July 9, 2009

Uninspiring Results of Today's 30Y Auction see Yields Rise to Around 4.30%

Although the auction was successful, most of the supply(67%) occured near the high end of the yiled curve(4.30)--this is not horrible news for GATT calculations; however, it does break the nice downward trend we were experiencing.

Record 11 Billion 30Y Auction is Pivotal for the GATT Rate


30Y Auction Results will be released today at 1:00 PM EST. If the bid-to-cover comes in as strong as yesterday's 10y, we could see rates hover around the 4.20% level for a while, if not, we're in for a wide ride to the upside--perhaps to 5% or more.



30-yr Bond Roller Coaster Continues today

Back up to 4.256% on the GATT Rate as of 10am.

We're seeing really big swings lately on this yield.

Wednesday, July 8, 2009

GATT Rate closes at 4.16% today

Huge drop is great news for those of you thinking about retiring in the 4th quarter. Of course, none of this really matters until August, which is the next lock-in month for Associates.

GATT dropping even further today

Shortly before 2pm, the yield on the 30-yr Treasury is down to 4.187% -- round up to 4.19% which is now lower than the rate that was locked in back in May for July-August-September.

Recent Trend of the GATT Rate


Jamie Cox has prepared this graph of the GATT rate over the last month or so. As you can see, the rate spiked up initially, but has been coming back down -- potentially good news for those of you contemplating retirement.


GATT Update for July 8th

After locking in the month of May at 4.23%, the GATT rate looked like it was going to skyrocket, closing as high as 4.75 on June 10th. But as of yesterday, July 7th, the GATT closed at 4.31 and is currently at 4.25 as of the time of this post.

Still too early to tell what the rate will look like in August for those of you debating between a 3rd Quarter vs. 4th Quarter retirement, but the last few weeks have been more encouraging on the interest rate front.