A Road Diverged
As public companies strive to meet or beat earnings targets, change is inevitable. Sometimes brands or segments are consolidation to reduce costs. Â Employees impacted by aÂ consolidation or reduction in force (RIF) may have the opportunity to take an early retirement package. Similar to retirement, deciding whether to accept an early retirement package requires a significant amount of thought, financial goal planning, and preparation. Â If you are considering an early retirement package at Procter & Gamble, be sure to consider our early retirement advice.
Determining Retirement Eligibility
The first question you should ask yourself is, â€œAm I retirement-eligible?â€ Â The typical package at Procter & Gamble consists of one year’s salary as a lump sum to start, but after, varies heavily depending on whether you areÂ retirement eligible. For P&G employees, this eligibility begins when your age and years of service at the company add up to 70 (The Rule of 70).
Early retirement is not out of the question, you can take a retirement package prior to becoming retirement eligible. However, if you do not meet their “Rule of 70″ eligibility threshold, you may be giving up valuable benefits. Â For instance, outstanding NSO’s or RSU’s and even healthcare benefits could be at risk if you donâ€™t meet eligibility.
For clients who are offered an early retirement package, it may be prudent to wait until you become retirement eligible. Of course, there are some exceptions to this rule but the majority of our clients benefit by waiting toÂ become retirement eligible and being able to retain the additional benefits and compensation they’ve earned. Retirement eligibility can have a significant impact on your goals. For instance, upon reaching eligibility, you may keep both NSO’s and RSU’s that you have been granted even if they have not yet vested.
In certain situations, an employee may have earned and saved enough to retire or take a package even before meeting the company’s definition of retirement eligible. In these cases, even if you believe you have the resources to fund your life in retirement, we’ll help you make sure that there are no special considerations or unplanned risks that could throw you off course. Â The starting point for a thorough retirement goals, risks & resources evaluation isÂ our financial planning process.Â
Perhaps you (and your spouse if you are married) have pensions, or 401k plans, or other retirement plans from previous employment. Are you concerned about the solvency of Social Security and whether or not you will receive the benefits you’ve earned? Â We’ll help you evaluate all of your P&G retirement assets and the advantages or disadvantages of different distribution methods. Â We’ll help you evaluate all of your outside assets, bank savings, mutual funds, annuities, and available benefits, all directed at achieving your goals.
Special consideration doesn’t end there, especially given your goals and expectations for retirement. One of the biggest risks today is longevity. Longer lifespans necessitate your ability to fund more years in retirement. How long you expect to live? Did your parents live into their 80’s, 90’s or to 100? Weâ€™ll make sure we account for any family history of illnesses and prepare retirement simulation scenarios that include long term care expenses, mitigation, and planning. What other goals do you have? Are you planning to move to a different state? Â Would you like to remodel your home? Â Will you travel the world? Â We’ll help you evaluate all of these things to give you the confidence you need to pursue the retirement you deserve.Â
To Retire or Not to Retire
Early retirement hinges on so many factors, it can be overwhelming to handle alone. Schmitt Wealth Advisers is at your service. Tap us to prepare your retirement analysis & simulation and deliver to you the range of probable outcomes in achieving your retirement. Â We are confident that through our process, along with our guidance, youâ€™ll know that whether life delivers the best case scenario, the worst case scenario, or something in-between, youâ€™ll be ready to retire with confidence.
This material was prepared by a third party for use by Schmitt Wealth Advisers, LLC., and is for informational purposes only.Â It is not intended to serve as a substitute for personalized investment advice or as a recommendation or solicitation of any particular security, strategy or investment product.Â Data presented herein has been obtained from sources believed to be reliable.Â Schmitt Wealth Advisers, LLC, however, cannot guarantee the accuracy or completeness of such information, and certain information may have been condensed or summarized from its original source.Â Schmitt Wealth Advisers, LLC, nor its investment adviser representatives gives tax or legal advice. Company benefits change periodically. Always consult with your employer for the most current benefits prior to making any decisions.