Pre-retirement Assistance

[SumDay]

Looking for ideas (for my j*b) for ideas employers could assist pre-retirees with. What could your employer have done (other than give you three+ years severance) that would have made your transition and subsequent retirement easier?

Some immediate thoughts came to my mind:

Support for pre & post-retirement stresses? (I'd send them here )
Capital preservation - how do I make my money last?
Help with finding medical insurance and understanding Medicare

I realize this board are the exceptions rather than the rule, but I'm looking for ideas to help those who would never come to a board like this, people who need real help with finances and the changes that come with retirement.

 

[FIREmenow]

Just saw this pop up:

This is the Newest Benefit Employers are Offering | Fox Business

 

[travelover]

My employer promoted a guy to be my boss that was a real azzhat. It made it super easy to say good bye.

But seriously, I think some coaching in how to best leverage the 401(k) would help. Many of my fellow cube rats just invested in company stock or interest funds.

 

[Big_Hitter]

I know of at least one consulting firm that started a financial wellness practice

 

[eytonxav]

Our CEO sold my former mega-corp down the river in a so-called merger of equals that rendered my stock options worthless and made him extremely wealthy. ER would have been far more glorious if the old stock value had been maintained.

 

[Aerides]

My Mega had tons of stuff, both financial and other resources. I mostly ignored them as I had my own planning, and it was very "101" oriented.

Interesting comment above about co-workers mostly investing 401k's in company stock - isn't that restricted in their plans? Mine is/was - with good reason. Couldn't have more than certain percent invested in Co Stock or something like that. Mind you, I did work in financial services, so maybe that just applied to that sector.

 

[Big_Hitter]

Interesting comment above about co-workers mostly investing 401k's in company stock - isn't that restricted in their plans? Mine is/was - with good reason. Couldn't have more than certain percent invested in Co Stock or something like that. Mind you, I did work in financial services, so maybe that just applied to that sector.

you can have 100% employer stock in an ESOP

 

[dunkelblau]

My employer has been able to get me to stretch out OMYs way beyond what I envisioned.

The first change was letting me control job content. I've always found the technical puzzle solving part interesting and fun while the routine tasks, meetings, and business travel were less attractive, so they carved out the slice I wanted and let me have it 100%. The second change was when I needed to move to my retirement location to handle parental care, they got me a desk at a local branch office. Actually they preferred I work from home due to space constraints at that office, but they rented another suite so I'm sitting here now. Finally, management has loosened up with respect to work schedule so time control became more flexible. My hours have dropped by quite a bit since I moved to Socal. In exchange I'm happy to occasionally check and respond to e-mails related to external customer requests during holiday times. Our new unlimited vacation plan will come in handy once I decide to test the waters on 'full retirement' again.

I guess these changes-- work content/place/time turned my retirement transition from an abrupt out-the-door into a slow fade. Financial benefits are icing on the cake for me, but for the marginally prepared could make a difference.

 

[Just_Steve]

My j@b offered pension consultants from the pension plan and financial consultants from Prudential who administered our 401k and 457 plans, all free of charge. Anyone who did not take advantage of this free resource if even to double check their numbers, shame on them.

 

[MichaelB]

Looking for ideas (for my j*b) for ideas employers could assist pre-retirees with. What could your employer have done (other than give you three+ years severance) that would have made your transition and subsequent retirement easier?

Two areas where employees have decades of knowledge and experience built up that isn't particularly helpful to meet the challenges of retirement are taxes and health care.

The tax knowledge base of a employee is heavily focused on minimizing earned income and maximizing deductions. What they need, as evidenced by the discussion threads here, is how to build a framework to analyze and choose the strategy that maximizes their long term after tax proceeds, and how to trade off between taxable and tax-deferred assets.

Regarding health care, employees with employer provided insurance don't have the knowledge to analyze and compare individual insurance policies, assess financially the consequences of different levels and combinations of cost sharing, understand network options. Also helpful would be a primer on Medicare, MediGap, Medicare Advantage, and how to choose among them.

 

[omni550]

Two of my employers offered excellent (pre)retirement classes that ran for several sessions. I took the first class when I was 30 and most of the others in class were in their 60s. One of the 60-some-year-olds commented to me that it was a bit late in the game for people at that age to make significant changes. (I was in my 40s when I took the class at my other employer.)

Besides finances, they got in to prepping for social, emotional, loss of 'job identity', loss of spouse/partner, preparing wills, etc. issues. All good info.

Retired at 56.

omni

 

[Another Reader]

My j@b offered pension consultants from the pension plan and financial consultants from Prudential who administered our 401k and 457 plans, all free of charge. Anyone who did not take advantage of this free resource if even to double check their numbers, shame on them.

My last government job's 457 was with Prudential. The consultants used the one-on-one retirement meetings to sell annuities to retiring old ladies that had excellent pensions and Social Security and wanted to "leave a little something to the grandkids." I steered clear of those thieves.

 

[king smoothie]

I would recommend large companies hire an Accredited Financial Counselor to educate and counsel employees regarding personal finances, particularly at key events - initial hire and retirement, a few years before retirement. The military does this to some extent, although not as effectively as we would like. A personal financial counselor - unlike most advisors, or brokers, or wealth managers- isn't looking to profit from the individual's assets. Small companies could hire for specific training sessions and have them on retainer. Full disclosure - I am an Accredited Financial Counselor and would love for this industry to get in higher demand. And hopefully higher salaries.

 

[athena53]

I believe that companies have to be very careful about providing financial advice to employees, even from outside parties, because of liability issues. The "consultants" selling annuities to older ladies is a perfect example. Even if a consultant provides sound advice, such as telling a 30-year old with 100% in the money market fund to take on more risk and the employee freaks out at the next major correction, it could cause problems.

Having said that- there's an appalling lack of knowledge about personal finance out there. I'd definitely want to see classes aimed at people with varying target retirement dates. The just-out-of-college crowd needs to know about the magic of compound interest and the dramatic difference between saving $X per month starting now and some bigger amount starting in 10 years- generally you can't catch up if you miss the compounding from saving early. They need to see the difference between a return on CDs vs., say, the S&P 500, including in down cycles, so they learn not to panic and sell at the bottom. They need to learn about fees charged on various investments and what happens if they cash in their 401(k) when they leave a job.

For the group retiring maybe 20 years from now- an "am I ready" session including some simple calculations of income at retirement given a reasonable withdrawal rate and assumptions about future contributions.

For those about to retire: yes, DEFINITELY talk about health insurance options. That was the most stressful part of retiring for me since only one week elapsed between my thinking it might be time to get out and my last day in the office. DH was Medicare-eligible and I was not, which really complicated things. Include advice on how to find what SS you're eligible for. Taxation is complicated (Roth conversions, withdrawing from before-tax vs. after-tax, RMDs) and everyone probably needs to get his/her own advisor but you can certainly show some examples of how complicated it is!

You won't always get through. I saw one study that showed that you can bend over backwards to show people what they're giving up in the long run by not maxing out their 401(k) or by neglecting to contribute at all, and some just won't.

 

[jazz4cash]

Our mega had a lot of resources available for deferred comp and pre retirement mostly through Fido. People generally just don't utilize or bother to educate themselves. In the course of being processed out I had detailed conversations with several folks in the wave of retirees that left with me. Almost all were clueless and relied on FA's for guidance. Not a one could provide a decent description of how their rollovers were invested. Mostly they say "I have a guy at xxx". I think most will be OK, though.


Sent from my iPhone using Early Retirement Forum

 

[Just_Steve]

My last government job's 457 was with Prudential. The consultants used the one-on-one retirement meetings to sell annuities to retiring old ladies that had excellent pensions and Social Security and wanted to "leave a little something to the grandkids." I steered clear of those thieves.

Ours were group seminars and only one on one if you signed up for it.