A few key strategies can help you maximize your retirement income. It all starts with planning. You can begin planning for your retirement anytime, even before you submit an official request. Building enough savings to cover your expenses without drawing down your pension is the key to a successful retirement. To do this, you need to understand how the various parts of your pension system work together.
Don’t Forget About Yourself
While a solid financial plan is essential, focusing on yourself throughout your career and retirement is also critical. Staying engaged in work, whether through a part-time job, volunteering, or continuing education, is a great way to reduce depression and maintain a sense of purpose. This, in turn, has been shown to lengthen lifespan and quality of life. When you take your Boeing pension benefits as a lump sum, you become responsible for the money once it leaves the company’s hands. This allows you to leave a legacy for heirs, which is impossible with a regular annuity payment. Many employees need to be more educated in Boeing stock within and outside their retirement accounts. Working with a financial advisor familiar with employees’ unique needs can help avoid unnecessary risk and get you on track for a successful retirement.
Invest in the Future
Investing is vital to helping you achieve your long-term financial goals. Unlike saving in cash, which loses value due to inflation, investing can help you grow your wealth and build a more secure future. Choosing the lump sum leaves them with control of the funds, which means it must be invested wisely. Calculating what a lump sum is equivalent to a lifetime stream of monthly checks depends on interest rates and life expectancy. Interest rates have been rising quickly, and those who choose the lump sum will see that amount drop if interest rates rise much more. This could be a significant factor in the decision to retire early.
Don’t Forget About Your Spouse
Many people who work rely on their pensions to provide them with a secure retirement. They also may want to leave a legacy for their spouse or other family members through heirs who will receive a portion of the pension payment. The benefit payments from a defined benefit plan can be taken as a single life annuity or a 50% joint survivor option. The option you choose is determined by how much you want to take and when you start taking it. Lump sum pension payouts decrease as an individual’s projected life expectancy increases. Taking the lump sum payout early could cost you money over time. This is another reason to run your numbers and consult a retirement-focused advisor.
Take Advantage of the Company’s Matching Program
While Boeing offers valuable resources and helpful staff to answer questions, working with financial professionals who specialize in helping employees maximize their compensation packages and benefits is essential. These are professionals who do not have any affiliation with Boeing and can offer unbiased, expert insights. As many of you know, when you retire or take your lump sum from a defined benefit pension plan, you can choose whether to receive your payout as a one-time or regular payment. Lump-sum payouts are typically higher in a low-interest rate environment but decrease as rates rise. Advisors can help you determine which option makes the most sense for your situation and how to invest your retirement funds properly. You’ll be surprised how much more you can get from your pension when adequately managed! A well-conceived financial strategy considers all potential sources of retirement income, expenses, and tax liability throughout your life. It can help you manage your savings, maximize pension benefits and minimize taxes. A well-conceived financial strategy can help you understand your retirement cash flow, determine your acceptable risk and grow your assets to prepare you for any life situation.