As Boeing is set to offer an unprecedented number of voluntary layoffs (VLO) to eligible employees, it has many close to retirement contemplating the offer. The offer of up to 6 moths pay plus 6 months continuation of medical benefits is enticing, but with only a week to make the decision how can one feel confident in answering the question “Should I accept a VLO?”
Your financial future is too important to leave to chance. The best way to answer that is to complete a financial plan. Financial planning is a process that can help you evaluate your whole financial picture and how a VLO fits into that picture. Most of us would retire today if we knew that we would not outlive our money. A financial plan allows us to outline all our needs, wants and wishes and determine if we have adequate resources to achieve all of them.
Those who are eligible have already been notified. You have until May 4th to register to participate. Those approved will have a layoff date of June 5th with the following offering:
• A lump-sum payment of one week of pay for every year of service (up to a maximum of 26 weeks of pay),
• Eligible to receive a continuation of medical insurance for up to six months after date of layoff, and
• Will forfeit recall rights and lose seniority. Therefore, anyone requesting the voluntary layoff should be certain they will not return to Boeing in the future.
• If more individuals apply for voluntary layoff than the allocated reductions set by Boeing, requests will be approved based on employees with the highest seniority.
Those considering the VLO will need to look at the potential impacts on drawing their Boeing pension, early retirement penalties may reduce your pension benefit amount. As you prepare to take the major step into retirement, you will also want to consider how and when you will begin drawing down your retirement plan assets. Beyond your Boeing pension and Social Security benefits, your VIP savings play an important role in your retirement income plan. Investment earnings account for 34% of retiree’s income. 1
We will want discuss adjusting your investment allocations with an eye towards asset protection (although it's still important to pursue a bit of growth to keep up with the rising cost of living).2 Together we will analyze and address the various financial decisions you will face at this important juncture.
Though our financial planning process we will discuss:
- Health care needs and costs, as well as retiree health insurance
- Income sources and income-producing investment vehicles
- Tax rates and living expenses in retirement
- Part-time work or other sources of additional income
- Estate planning
We understand how important of a financial decision this is and are here to empower you to make an informed decision that will set you up for financial success in retirement. Take charge of your financial future and contact us for a complimentary consultation today!
Article by: Lindsey McKay
1 Source: Fast Facts & Figures About Social Security, 2017, Social Security Administration
2Asset allocation is a method used to help manage investment risk; it does not guarantee a profit or protect against a loss.