Curveballs?

Tuesday, October 23, 2018

I must admit that I do love the baseball playoffs. I don’t watch many games during the actual season, but once the playoffs start, I try to catch as many of the games as possible. Everyone plays hard, the crowd is amped up, the games are usually exciting, and the games’ best pitchers, usually have their best stuff this time of the year. The curveball I wanted to talk about this week is not related to baseball but the kind of curveball that life sometimes throws at you. Specifically, those times when your employer tosses a curveball at you, perhaps, at a time when you were not expecting it. How you respond to that moment can have lifetime implications.

My company is in Kalamazoo, and one of our communities’ largest private employers, Pfizer, just announced a curveball to many employees. The company has announced a Voluntary Early Retirement Program (VERP) to provide eligible U.S. colleagues nearing retirement an opportunity to leave with enhanced benefits. The problem is that to voluntarily participate you must notify Pfizer of your election to take the offer between October 16, 2018 and November 2, 2018.  So, what do you do if you are an employee of Pfizer, you are told this on Tuesday, October 16, and you have 18 days to decide if you want to retire on December 31, 2018?

Maybe, you were planning on retiring 2 or 3 years from now? Have you even thought about what your retirement could look like? Do you have something to retire to? Do you even know how much income you will need each month in retirement to support your lifestyle? Our company has been helping individuals in the Kalamazoo area figure out these questions for over 60 years. At first glance, the offer appears to be very generous. Each eligible employee will receive a severance equal to 12 weeks’ base salary, plus three weeks’ base salary per year of service from most recent hire date with a maximum of 104 weeks’ base salary. In addition, you can continue active health and insurance continuation of up to three years of medical, dental, vision and basic life insurance at active colleague rates. Perhaps, more importantly, if you were eligible to retire, up to five points may be added to age and/or service toward reaching the full points needed for full retirement benefits.

Think about the fact that you were given 18 days to decide. A decision to retire impacts your life for many years. I can’t stress how important it is for a person, who has been dealt that curveball to reach out and seek the advice of a Certified Financial Planner. Does the three years of medical get you to age 65?  Will you have to go out and purchase health insurance for one year or perhaps two? You could qualify to continue to get paid for almost 2 years. How does this impact your 401k and pension benefits? 

When a client begins a relationship with our firm, I am asked many times about the value our firm brings to the table. Why should a person seek the advice of Certified Financial Planner? It is precisely times like this when you should seek professional help in looking at the big picture. Getting an objective opinion from a team of experienced professionals that will verify you are good to go is a must. This is not the first time Pfizer has done this in our community. We have helped many individuals in our community navigate similar situations in the past. We have the resources and time to help you in this decision. Let our experience help you in making this decision.

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Author

Wesley Lentz Wesley Lentz

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