Many Northrop Grumman employees and retirees may not understand how to fully take advantage of their employer-sponsored retirement plans. We’ve created this special report to help those in the Northrop Grumman company demographic make the most of their savings, investment opportunities, and help improve their prospects for a comfortable retirement.

Many Americans worry about their financial security during retirement. An employer-sponsored retirement plan is one of your most powerful tools for pursuing a comfortable retirement, especially for those coming from Northrop Grumman companies. The money you invest in your Northrop Grumman 401(k) has tax-deferred growth potential, and generally, only becomes taxable once withdrawals begin in retirement. By making pre-tax contributions to your retirement plan, employees retiring from Northrop Grumman can also reduce their income each year, which may help manage their annual tax bill.

Even if your retirement is years away, those retiring from Northrop Grumman should strategize now in order to help evaluate current savings, estimate how much they may need to save for a comfortable retirement lifestyle, and help remedy any potential income shortcomings

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According to a 2021 report, 83% of Americans aged 45-59 have retirement savings, but only 40% feel they are on track.[6] TRG is here to help those in Northrop Grumman be part of the people that are on track.

We have developed this guide to help employees retiring from Northrop Grumman or their loved one understand the steps involved in preparing for retirement and making the most of their options when contributing to a 401(k) retirement plan. Keep in mind: this whitepaper is for informational purposes only. It’s not a replacement for real-life advice, so make sure to consult your tax, legal, and accounting professionals before modifying your retirement strategy. Remember, tax rules are constantly changing, and there is no guarantee that the treatment of certain existing rules will remain the same, which is why TRG has the role of helping those employees retiring from Northrop Grumman to stay compliant and within legal boundaries.

In 2022, you can contribute up to $20,500 to your 401(k) account. If you are age 50 or older, you can contribute up to $6,500 more.

Source: IRS.gov

The best piece of retirement investment advice for employees retiring from Northrop Grumman is to start today. The longer your money has to grow, the bigger your nest egg will be. Any amount you invest today will have the chance to compound. Consistency is key and the easiest way to achieve that is to automate your contributions. You can have money taken directly from your paycheck, automatically, each month. If that is not an option available to you, set up an automatic transfer through your broker. Many employers provide matching contributions to accounts of employees retiring from Northrop Grumman. It is essentially free money designed to increase your savings over time. A good rule of thumb is to contribute at the very least, the minimum amount needed to get the maximum match from your employer. For example, with a dollar-for-dollar match, if you put 4% of your salary into your retirement account, Northrop Grumman will put in 4%.

One of the savviest moves that employees retiring from Northrop Grumman can make as an investor is to increase your contribution rate to your retirement plan as much as you can. If you haven’t reviewed your contributions recently, a financial professional can help you understand how much you are allowed to contribute and how to boost your savings rate while still maintaining a comfortable lifestyle. It can be hard to suddenly increase your contribution rate, which is why we recommend taking a gradual approach and increasing your deferrals each year. As an employee or retiree from Northrop Grumman, you might consider saving 10 percent of your salary, at a minimum, and gradually increase contributions to 15 or 20 percent as you approach retirement. We also recommend using windfall events, like bonuses, tax refunds, or other sudden infusions of cash, to help grow your nest egg. A Traditional IRA can be an excellent complement to your Northrop Grumman 401(k) plan and give your savings the benefits of tax-deferred growth potential.

The IRS requires employees retiring from Northrop Grumman to start taking minimum distributions from a Traditional IRA when you reach age 72. Withdrawals from Traditional IRAs are taxed as ordinary income, and, if taken before age 59½, may be subject to a 10-percent federal income tax penalty. Employees retiring from Northrop Grumman may continue to contribute to a Traditional IRA past age 70½, under the SECURE Act, as long as you meet the earned income requirement. Time and tax-deferred growth can be two critical ingredients to long-term financial success. Taxes can take a big bite out of investment returns, which is why it makes sense to use the tax advantages of your qualified retirement accounts to save money for the future.

The benefits of compound growth and tax deferral for Northrop Grumman employees mean that small, consistent contributions have the potential to grow significantly over time. Eventually, you will have to pay taxes on withdrawals from your retirement plan. However, many Americans find themselves in a lower tax bracket during retirement and may be able to manage their taxes. If you are a Northrop Grumman employee and believe that you are currently in a lower tax bracket than you will be in retirement, you may want to speak to a financial professional about contributing to a retirement savings account.

As you approach retirement, the IRS allows you to contribute more to your retirement plan. These “catch-up” contributions are a great way to boost your savings, especially at the point in your career that you’re likely making the most money.

If you have any questions about your employer-sponsered retirement accounts, you can reach out to your HR Department.

Every 401(k) plan is a little different, and as a Northrop Grumman employee it’s important to learn about the Northrop Grumman plan options available to you. Your Northrop Grumman plan administrator will be able to provide you with details about vesting schedules, loans, investment options, and any limitations to withdrawals. A financial professional can help you review this document to be sure that you understand it fully.

As an employee leaving Northrop Grumman, you have a couple options available. You can leave your plan with Northrop Grumman (if allowed), roll it into your new employer’s plan, roll it over into an IRA, or cash it out. If you have less than $5,000 in your account, Northrop Grumman may require you to transfer your money out of that retirement plan.

Your new employer's retirement plan might offer investment options that better support your financial goals.

Tips To Enhance Your Contributions:

• Consider increasing your salary deferral every time you get a raise.

• Create a budget and minimize unnecessary expenses, so that you can leave extra room for savings.

• Clarify your plan fees and maintenance charges, so that you’re sure you’re not paying too much.

Should You Take Out A 401(k) Loan?

Many employees of Northrop Grumman have access to loans from their workplace plan. If you have significant amounts of high-interest debt, it may make sense to borrow to pay down your debt. However, there are several potential downsides to consider. The money you borrow will no longer be invested, robbing you of potential growth. You will also have to repay the loan at regular intervals, using after-tax dollars, which means you may be taxed twice on that money. TRG ensures that your resources as a Northrop Grumman employee remain safe and will actively manage your assets to allow you to reach your goals and pay off debt. Source: FINRA.org

If you have any questions about your Northrop Grumman-sponsored retirement accounts, you can reach out to your HR Department.

If you’re thinking about retiring from Northrop Grumman soon, you may have many questions. Many Americans aren’t sure about when they can afford to retire or how large their retirement nest egg may need to be. When you’re evaluating the decision to retire, consider the following.

• Retirement finances. In order to retire from Northrop Grumman, you should be prepared to cover your retirement living expenses through your retirement savings, Social Security benefits, and other sources of income.

• Health and longevity expectations. Retirees from Northrop Grumman companies today are living well into their 80s and 90s. Your current health, family medical history, and lifestyle choices can help you estimate how much you should budget as a Northrop Grumman employee for health care expenses.

The decision about when to retire as a Northrop Grumman employee depends entirely on your personal circumstances. A financial professional can help you understand how your age, finances, health, and sources of income may factor into retirement strategizing calculations.

Have you strategized your retirement income?

If you are a Northrop Grumman employee worried about not having enough put away to retire, you’re not alone. Many Northrop Grumman employees worry about outliving their assets and want to know how much they need to have saved before they can safely retire. You can get a head start on strategizing for your retirement income by asking the following questions:

• What will my monthly retirement living expenses be?

• How much monthly income can I count on from Social Security and other sources?

• Is there a shortfall between my expenses and my guaranteed income that I’ll need to cover from my retirement savings?

• What is my plan to pay for health care, assisted living, and nursing home care?

• What kind of financial legacy do I want to leave?

Regardless of what stage of life you are currently in, as a Northrop Grumman employee, financial strategizing can help you set financial goals and build a game plan. For most Northrop Grumman employees, a comfortable retirement is one of their primary objectives, and we can help you ensure that your savings and strategies are on track. However, financial advice is also very useful for other important milestones, like the purchase of a house, a college education, or the elimination of debt.

Many Northrop Grumman employees have complex finances, and professional guidance can help you be better prepared to meet the future. We offer a range of services that can help you manage debt, save for the future, and protect your family from the unknown.

We hope that you, as a Northrop Grumman employee, found this guide informative, educational, and most of all, reassuring. While benefits and retirement plans can be complex, taking action on a few of the steps that we’ve outlined may make a big difference in the future.

We are a resource to you and your family as you prepare for retirement after leaving Northrop Grumman. It’s common to have questions and concerns, and we are happy to answer any questions that you may have about your personal financial situation or future goals. If you have any questions about the information presented in this report, please contact us. We would be happy to be of service to you and your family.

The Retirement Group is a nation-wide group of financial advisors who work together as a team.

We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.

TRG takes a teamwork approach in providing the best possible solutions for our Northrop Grumman clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.

Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations.

Throughout your retirement years we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops and regular updates. You may always reach us at (800) 900-5867.

1. What to do with an Early Retirement Ebook

2. Social Security Ebook

3. Lump Sum vs. Annuity Ebook

4. 401(k) Rollover Strategies Ebook

5. Closing the Retirement Gap Ebook

6. Board of Governors of the Federal Reserve System 2021

7. Investopedia. Feb 20, 2021