INDUSTRY INSIGHT
YOUR FINANCES
SPONSORED CONTENT
Facing an Early
Retirement Buyout?
Sign Me Up or Run Away?
R
ecently we have helped many individuals and families
decide on whether to accept an early retirement buyout
offer from their employer. What can seem like a simple
decision does have some complexity and needs to be
thoughtfully analyzed. Today we explore a few of the considerations
prior to deciding to accept or decline a buyout offer.
Am I Financially Ready?
We find ourselves unsure as to how many financial resources are
necessary for our entire life journey. Often with an early retirement
buyout, there is a pension option. Is it best for me to take the lump
sum or the pension income? If I elect the lump sum, how should I
invest that money? Or, which pension income option would be best
for me and my family?
The complexity of choices can be daunting. Consider talking with
a financial advisor to help you spot any issues and craft a plan to
maximize your probability of success.
Factor in Social Security Benefits.
Social Security payments are calculated based on an average of the
35 years in which you earned the most, which could mean missing
out on another year of high earnings. If you opt to collect before your
full retirement age (66 for people born before 1960), your benefits are
permanently reduced. If you delay claiming Social Security until age
70, you’ll get higher payouts for the rest of your life (assuming you
live past age 87).
If your pension income, Social Security income, portfolio income,
etc. is not enough to cover your basic living expenses, you may
need to look for new employment. You may also have to think about
downsizing or selling large assets to help fund your retirement.
As with most decisions, what you choose depends on your
individual situation. With an early retirement buyout, you’ll want to
consider reviewing all the numbers and realistically weighing your
options before accepting.
The Final Countdown
Agreeing to accept an early retirement package is a big decision.
Carefully consider the questions and impact of the issues raised.
Having a professional advisor as your teammate can help identify
financial blind spots and assist you in successfully navigating the
future. We invite you to learn how our leadership and expertise
empower your family’s thoughtful financial decisions with a plan.
Who We Are…
• As fiduciaries – serving your best
interests and avoiding conflicts of
interest
• As financial strategists and
coordinators – helping you design
and take the actions needed to
take the best possible care of your
total financial situation
• As astute observers of
markets, politics, technology, and
demographics – helping you
assess the impact of global forces
on your assets, your community,
and your peace of mind
What Will I Be Giving Up?
If you are younger than age 65 and don’t yet qualify for Medicare,
you may be losing lucrative health benefits previously received
through your employment. COBRA coverage may be available for a
limited time or possibly coverage under a spouse’s health insurance
plan. There are many factors predicating continuing health insurance
and the costs of doing so.
One thing that could affect your decision is a non-compete
agreement, and the ability to continue working with current clients
if you wish to keep working. Some will want to talk with an attorney
prior to signing an agreement, to be sure they all understand
the intricacies of the buyout agreement. If you’re fortunate, the
retirement buyout may include a non-compete waiver.
McKinley Carter
Wealth Services
100 Bradford Road, Suite 400
Wexford, PA 15090
724-940-4400
mc-ws.com
McKinley Carter Wealth Services, Inc. (“McKinley Carter”) is an SEC-registered investment adviser. For additional information about McKinley
Carter, including fees and services, send for our disclosure brochure as set forth on Form ADV using the contact information herein. Please read
the disclosure brochure carefully before you invest or send money.
Industry Insight was written by
Brian T. Gongaware CFP® and
Christopher C. Horan CFP®.
Brian is a Principal of McKinley
Carter, serves as Director of
Advisory Services in the Wexford
office, and is also a Certified
Financial Planner™ professional.
Chris is a Financial Strategist
in the Wexford office and a
Certified Financial Planner™.
Brian and Chris use their expertise in investment management to help clients identify
their financial goals and needs, and design appropriate financial investment strategies.
NORTH ALLEGHENY
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WINTER 2018
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