Wealth Management & Financial Planning

Wealth Management & Financial Planning

Time-Sensitive Decisions Concerning Your Retirement

These are complex and chaotic times forcing us to make decisions in less than optimal circumstances. Every investor has these challenges, but there is usually more clarity over economic stability. Today is a more significant leap of faith as we decide to either stay the course or alter our investment options.


This column is for our friends at Allison Transmission and other companies that have time-sensitive options. Imagine working for 30 or more years at a place you enjoy and then being given to the end of the month to decide whether or not to end your career.


We all love choices, but most of us worry about making actual decisions. For the COVID-19 Special Separation Program for US Salaried Employees of Allison Transmission, INC, your choice is based on your attained age, years of service, personnel evaluations, and the critical nature of your position for Allison's ongoing operations.


Each department has a cap to the number of people allowed to accept the offer. Imagine going through the turmoil of making the decision and then being told, “sorry, you get to stay!” The current times are not favorable for most of the employees that received the letter. This offer is similar to the one General Motors made to their employees years ago.  


At the Financial Enhancement Group, we have developed a checklist to help you think about these choices and decisions. We understand that circumstances are unique, and this is not a “one size fits all” option. We recognize it is not an easy task, and certainly one not to take lightly.


There are more than 23 things you will want to consider in your decision matrix. We have a free resource for you, located at yourlifeafterwork.com/Allison. Even if you are not in this situation today, this is still a helpful resource for you.


The biggest issue for most is understanding the retirement budget, which we have written about many times. You should divide your budget between fixed expenses and social expenses. Fixed expenses need an inflationary factor added. With social expenses, we recommend little to zero inflationary adjustments.   


Your job financially is to replace your standard of living, not your income. We have seen people stay at work because they didn't want to give up a fantastic income. If you love your job and plan to work for years, that may not be a bad strategy, but it isn't necessarily the best strategy.


Let's say you make $100,000 a year working. But you have a pension plan that would pay you $45,000 a year to retire. The net reality is your employers are only paying you $55,000 to work. You may very well find another employer who would pay more than $55,000 for your experience. With your 401(k) and other resources, you may find that you can fully replace your standard of living.


These are challenging scenarios to impinge – especially on short notice. You have to ask yourself the right questions, and time is of the essence.


Disclaimer: Joseph Clark is a Certified Financial Planner™ and the Managing Partner of Financial Enhancement Group, LLC an SEC Registered Investment Advisor. He is the host of “Consider This” found on WIBC Saturday mornings from 6-7a.m. as well as three other Indiana-based radio stations. Joe has served as an Adjunct Assistant Professor at Purdue University where he taught the capstone course for a degree in Financial Counseling and Planning.

Financial Enhancement Group is an SEC Registered Investment Advisor.  Securities offered through World Equity Group, Inc., Member FINRA/SIPC, and a Registered Investment Advisor.  Investment Advisory services offered through Financial Enhancement Group (FEG) or World Equity Group.  FEG is not owned or controlled by World Equity Group.

Joseph Clark and World Equity Group, Inc. do not provide tax or legal advice. For tax advice consult with a qualified tax professional. For legal advice consult with an attorney


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