Thank you for your question. Whether you’re retired or looking to retire from Lockheed Martin, you’re likely to have questions about your pension payments and how inflation affects them. Lockheed Martin provides their pension in the form of an annuity. An annuity is a fixed monthly payment that is calculated based on a formula involving your age and years of service at the company. This payment begins on the first of every month after you retire and lasts for the rest of your lifetime. So even if you live past 100 years old, Lockheed Martin will continue to pay you every month. 

While an annuity payment is one of the most reliable sources of income during retirement, many retirees see their annuity payments wither away due to inflation. Inflation causes prices for almost every good and service to increase, so as time goes on your monthly expenses will increase even if your number of purchases stays the same. If, for example, inflation increases by 8% the value of your annuity payment would drop by 8%. 

This is significant since Lockheed Martin’s annuity payment is fixed and does not account for any cost of living adjustments, so your payment amount will not increase even though your monthly expenses will increase.

Even though inflation devaluing your pension can be stressful to deal with, understanding this concept is crucial as it’ll allow you to better plan your retirement and ensure that you’ll be able to keep up with growing expenses.