Life Change: Employment

• DC plans are known to the public as Traditional 401(k) or 403(b) plans, but can also include 457 plans. Each of these options are “self-directed” benefits that allow the employee to contribute pre-tax, and usually receive an employer match up to a specified percentage of your compensation. Each of these plans will have different rules for withdrawals, distributions, and participation provisions. You should have a deep understanding of how these plans can impact your retirement, as well as impact the tax-deductibility of individual IRA contributions etc.
• ROTH Defined Contribution Plans are qualified retirement plans offered by employers similarly to the above traditional variants, except the funds contributed are after-tax. This means that the tax treatment of this money is vastly different before, during and after your retirement.

IF you have a pension lump sum available to you, click here so one of our fiduciary advisors can give you an independent analysis of all your available options.

• DC plans are known to the public as Traditional 401(k) or 403(b) plans, but can also include 457 plans. Each of these options are “self-directed” benefits that allow the employee to contribute pre-tax, and usually receive an employer match up to a specified percentage of your compensation. Each of these plans will have different rules for withdrawals, distributions, and participation provisions. You should have a deep understanding of how these plans can impact your retirement, as well as impact the tax-deductibility of individual IRA contributions etc.
• ROTH Defined Contribution Plans are qualified retirement plans offered by employers similarly to the above traditional variants, except the funds contributed are after-tax. This means that the tax treatment of this money is vastly different before, during and after your retirement.

IF you have a pension lump sum available to you, click here so one of our fiduciary advisors can give you an independent analysis of all your available options.

• Employee Stock Ownership Plans or ESOPs are employee benefit plans that allow for corporate ownership participation. These are qualified plans and stock contributions are made by the employer.
• Company Stock inside 401(k) allows employees to purchase shares of company stock inside their qualified plan with personal and employer match contributions. IF you hold company stock inside your 401(k) with significant appreciation, you may potentially initiate an NUA (Net Unrealized Appreciation) transaction and enjoy favorable tax treatment on the difference between your cost basis and current holding value.
• Stock Purchase Plans are plans that allow employees to purchase company stock at a discounted price. Contributions are typically made through payroll deductions and funds are used to purchase shares at predetermined dates on behalf of the employee.
• Qualified and Non-Qualified Stock Options have vast differences in tax treatment and transferability. If your benefits package includes either of the two, it is important you understand the details of ownership and timing of exercise.

Think twice before rolling over your company stock into an IRA. Even a partial 401(k) rollover of non-company stock can forfeit the ability to initiate a future NUA transaction. Talk to one of our loyal advisors today to get a tax analysis on your company stock.

• Bonuses are often large chunks of compensation often based on individual or corporate performance. This provides a way to further seed retirement assets, or can be used to contribute to other major family investments.
• Life insurance is something a lot of employers offer to their employees. Know what type of plan is offered and whether or not there will be a cash value. These plans should not replace any permanent insurance, as they are typically not portable when you separate from service.
• Disability Insurance is something you can purchase on your own or through your employer, if it is offered. Depending on your career field and personal debt service, long or short term disability will be a crucial part of your financial plan.
• Health Insurance offered by your employer can be extremely valuable depending on how you are splitting the monthly costs. For small business owners, a conversation about the various group health insurance options could potentially save you thousands of dollars a year.