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Financial Symmetry: Balancing Today with Retirement

When considering retirement, do you wonder what financial opportunities you may be missing? Busy lives take over and years pass without taking advantage. In this retirement podcast, Chad Smith and Mike Eklund unveil financial opportunities, to help you balance enjoying today so you are ready to retire later. By day, they are fiduciary fee-only financial advisors who answer questions about tax savings, investment decisions, and how to save more. If you’ve been putting off your financial to-do list or are just not sure what you’ve been missing, subscribe to the show and learn more at www.financialsymmetry.com. Financial Symmetry is a Raleigh Financial Advisor. Proudly serving clients in the Triangle of North Carolina for over 20 years.
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Now displaying: Page 1
Nov 16, 2020

Have you been offered an early retirement package?

Video recap: https://youtu.be/jpIfdhYVx6Y

Early retirement packages are on the rise. Companies are often looking for ways to cut costs and one way to do that is to give highly compensated employees an incentive to ease into retirement. Usually, these packages offer a one-time payment and sometimes they come with a period of additional healthcare coverage. 

If you are offered an early retirement package many questions will arise. Is this a good deal? Is the package negotiable? What will I do about health insurance? And, of course, should I take it? 

On this episode, Mike and I will give you the tools to create a framework to think about the questions that early retirement packages bring. Listen in to learn how to weigh this huge decision. 

How does this early retirement package affect your long-term financial plan?

Before you consider anything else you need to think about how this package fits into your long-term financial plan. Receiving a lump sum can give you a lottery mindset, so you’ll need to consider what is most important to you. How would this package fit into the bigger picture of retirement?

This is a good time to ask a professional for help. If you are working with a financial advisor, you’ll definitely want to ask their opinion. A financial advisor can help you spot risks and opportunities that you may not have otherwise seen. Mike has some questions you may not have asked yourself about this early retirement package, so make sure you listen in to hear all the questions. 

What about insurance?

The main reason that many people decline an early retirement package is due to insurance. You may want to see if health insurance is a negotiable part of the package. Sometimes the company will offer to pay for your health insurance for a certain period of time. 

You can also check into COBRA coverage which will guarantee you 18 months of health insurance coverage under your old plan--just be prepared for a bit of sticker shock. 

Another way to cover your health insurance is to check into the ACA healthcare exchange. Be sure to weigh all of your healthcare options before signing the deal. 

How will this influence your tax picture down the road? 

So many tax opportunities pop up with an early retirement package. You’ll want to consider all the ways that you can save on taxes if you do decide to accept it. Do you have a health savings account? If so, make sure to max it out. Have you maxed out your 401K for the year? What about your company stock?

If you are under 59 ½, where will your income come from? When do you plan on taking Social Security? Now is the time to plan how to build your ultimate retirement withdrawal strategy. 

Ask yourself: what’s next?

Will you be able to transition into retirement successfully? The answer to this may be dependent upon whether you are retiring from something or to something. This is why it is important to consider what’s next. 

Will you relax on a beach somewhere, find another job, become a consultant, or try your hand at entrepreneurship? An early retirement package can bring about myriad choices, but you need to make sure that you are financially prepared to accept them. 

Outline of This Episode

  • [3:15] How does this decision affect your long term financial plan?
  • [8:02] Health insurance often makes or breaks this offer
  • [10:02] How will this influence your tax picture down the road? 
  • [15:04] Ask yourself: what’s next?
  • [17:43] Alternate scenarios
  • [18:40] The progress principle

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