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Decoding the Home Equity Line of Credit (HELOC): Weighing the Pros and Cons for Bristol-Myers Squibb Employees

Healthcare Provider Update: Healthcare Provider for Bristol-Myers Squibb Bristol-Myers Squibb collaborates with multiple healthcare providers, including major national health insurers and pharmacy benefit managers (PBMs) like CVS Caremark and Express Scripts, to ensure patient access to their medications. Their widespread distribution network encompasses hospitals, clinics, and specialty pharmacies, enabling healthcare professionals to prescribe and dispense their pharmaceutical products effectively. Potential Healthcare Cost Increases in 2026 As we look toward 2026, healthcare consumers should brace for significant cost increases stemming from a combination of factors. Record hikes in premiums for Affordable Care Act (ACA) marketplace plans are anticipated, with some states facing increases over 60% due to higher medical costs and the potential expiration of federal premium subsidies. Reports indicate that nearly 92% of marketplace enrollees could see their out-of-pocket premiums soar by over 75%, putting immense financial strain on families. Coupled with escalating hospital and drug prices, particularly specialty medications like GLP-1 weight loss drugs, the burden of rising healthcare expenses is likely to affect millions as they navigate their insurance options and healthcare needs. Click here to learn more

'For Bristol-Myers Squibb employees, a Home Equity Line of Credit (HELOC) is a great way to tap home equity for convenience and flexibility, but it is important to understand the risks involved, including the variable rates and the fact that you may be putting your home at stake, says Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.'

'A HELOC can indeed be a useful tool for the financial flexibility that Bristol-Myers Squibb employees may require, but only if it is used correctly to support long-term retirement goals, advises Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.'

In this article, we will be discussing:

1. The advantages and the flexibility of a Home Equity Line of Credit (HELOC).
2. The pros and cons of HELOCs and things to consider before applying for one.
3. Other ways to get financial flexibility instead of a HELOC.

Homeownership, including for those who work for Bristol-Myers Squibb companies, provides an opportunity to tap the value of the residence. One way of tapping this ownership stake is through a home equity line of credit (HELOC). While a home equity loan provides a lump sum upfront, a HELOC allows you to borrow smaller amounts at a time. This type of borrowing structure is very useful because you are only required to draw the funds you need at any particular time, thus helping you manage your finances better.

It can be used for home repairs, college tuition, or any other purpose you need the money for, and a HELOC can be a useful tool in tapping the equity in your home. HELOCs have other advantages, which include lower APRs than credit cards, the ability to deduct interest payments to the IRS, flexible withdrawals and repayments, and helping to boost your credit score. But there is the other side, and it includes the following: the loan has to be secured by your home, you will stake your home equity, the interest rates may rise, and you might end up accumulating a big balance fast.

Understanding a Home Equity Line of Credit (HELOC)

A HELOC is a type of credit that you can borrow at a time of need. Like credit cards, HELOCs are assets that have a variable interest rate, which means that the monthly payment will change according to the rate at the time of borrowing. Typically, a HELOC has a maximum limit that is tied to the equity in your home. You can choose to take part of it or the whole amount of your line, and you pay interest only on the amount that you have borrowed. For instance, if you have not used any of your credit line, you will not be required to pay principal or interest on the credit line.

Benefits of a Home Equity Line of Credit (HELOC)

If you are a homeowner with a lot of equity in your home, then a HELOC has several benefits that make it worthwhile to consider.

Access to Lower APRs:

Although overall mortgage interest rates have risen significantly since 2022, some of the best HELOC rates are still generally lower than those of credit cards. This makes HELOCs good for debt consolidation or for financing ongoing renovation projects.

Potential Tax Deductions:

The Tax Cuts and Jobs Act of 2017 did not eliminate the ability to deduct the interest on a home equity line of credit (or home equity loan) so long as the money is used to fix the home. To qualify for this deduction, the interest must be used to ‘buy, build or improve the home that is secured by the loan.’ There are certain thresholds and requirements for deductibility and the itemizing of deductions is required.

Flexibility in Borrowing:

The main advantage of a HELOC is that the money can be spent when it is needed. One disadvantage of home equity loans and personal loans is that they provide the borrower with a lump sum amount of money; a HELOC, however, allows the borrower to take money when he or she needs it. This is particularly useful where the amount of money that will be required for the renovation or repair is not well defined because it enables the borrower to make smaller monthly payments if he or she requires less than expected.

Repayment Flexibility:

HELOCs are usually flexible as to the payment of the amounts drawn. The life of your HELOC can also vary based on the amount of money you want to borrow and the lender you are working with. Some HELOCs permit you to make payments during the draw period towards the balance, though.

Potential Credit Score Boost:

A HELOC can help improve your credit score by showing that you make timely and regular monthly payments. Payment history and credit mix are important components of your credit score, and managing a HELOC responsibly can help improve your credit profile.

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Considerations of a Home Equity Line of Credit (HELOC)

Although HELOCs have their advantages, it is crucial to know about the considerations and potential drawbacks that come with them.

Home as Collateral:

When taking a HELOC, you are putting your home on the line. Although this can lead to lower interest rates, it also comes with more risks. Missing monthly payments can have severe consequences as your home is at stake.

Variable Interest Rate:

Home equity loans have a fixed interest rate, while HELOCs have a variable interest rate. This means that your interest rate will change with the Federal Reserve’s actions. Even if you get a HELOC with a low rate, it is important to be ready for the rates to change in the future.

Risk of Overspending:

One of the downsides of HELOCs is the tendency to spend money impulsively because of the freedom that comes with them. During the draw period, which is characterized by interest-only payments, borrowers may draw cash without considering the long-term effects of their actions. When you begin making payments during the repayment period, you may be surprised at the increase in your payments if you haven’t set aside funds or created a budget, as you would during the draw period.

Reduction in Home Equity:

A HELOC is, in fact, a loan that allows you to borrow money from your home equity. You will be paying money to your home equity account when you use a HELOC. As for the home values, there is a possibility that you may end up owing more on your home than it is worth, especially if the housing market is not doing well. Also, having an outstanding HELOC may limit your ability to get more borrowing from your home equity.

HELOC Repayment: How It Works

The repayment of HELOC is quite unique and the required payments and methods of calculating them change over time. Generally, a HELOC has two main phases: The draw period and the repayment period. You are required to make minimum monthly payments of only the interest during the draw period that usually ranges from 5 to 10 years. The amount you are likely to pay will increase every time you withdraw more money from the credit line since the interest will be charged on the higher balance. The payment will also change with the change in the interest rate. Some HELOCs permit you to make payments during the draw period from the balance, though. After the draw period, you transition to the repayment period, which can go up to 20 years. In this phase, you are expected to make payments that will cover the interest and a part of the principal amount. This means that the payment will be different during the draw period and when the draw period ends and the repayment period starts. Although not common, some HELOCs have a balloon payment provision that requires the borrower to make a balloon payment at the end of the draw period to settle the loan. It is, therefore, important to check on the terms of your loan so as not to be caught unawares by a large payment duty.

Alternatives to a Home Equity Line of Credit (HELOC)

However, not everyone may find a HELOC to be the best choice for them. Look at these loan alternatives when choosing the one that is right for you.

Home Equity Loan:

Home equity loan is the same as HELOC, but you will not receive the credit line; you will receive the money in one sum. A home equity loan has a fixed interest rate and a set repayment period, which makes the monthly payments constant. Home equity loans might be suitable for you if you need the money upfront and know how much you need.

Cash-Out Refinance:

A cash-out refinance is when the mortgage is replaced by a new one with a larger balance. This kind of refinance provides you with up to 80 percent of the value of your home in cash. For instance, if your house is $400,000 and you have a balance of $200,000, you can get a cash-out refinance of up to $320,000, which would give you $120,000 in cash (excluding closing costs).

Personal Loan:

A personal loan has a fixed monthly payment, a fixed interest rate, and a lump sum payment. Personal loans are unsecured, and you do not have to put your home on the line to get one. Personal loans have higher rates than home equity products but are easier to apply for, and you can get them online. They are ideal for people who do not want to tap their home equity.

In conclusion, HELOCs are a type of home loan that allows homeowners to tap their home equity, but there are other considerations that should be made before applying for one. As with any other financial product, HELOCs have their pros and cons, which include lower APRs and tax deductions as advantages and the use of your home as collateral, variable interest rates, overspending, and a reduction in home equity as disadvantages. Knowing the specifics of a HELOC’s repayment is important when managing the financial responsibilities that come with the loan. Reviewing other loan options can also help in coming up with the best solution depending on the individual’s needs and circumstances.

Research has been conducted to determine the impact of a HELOC on 60-year-old individuals who are approaching retirement and planning to retire. According to a 2018 study by the National Bureau of Economic Research, retirees who had access to a HELOC used it to cover unexpected expenses or to enhance their financial flexibility during retirement and had better financial security and satisfaction than those without a HELOC. This indicates that a HELOC can be used as an emergency fund and financial tool to help retirees manage unexpected expenses or boost their retirement income. (Source: National Bureau of Economic Research, 2018)

A HELOC can be compared to a personal financial toolbox that people, including retired employees of Bristol-Myers Squibb companies, can turn to during their retirement. Like a well-stocked toolbox, which is equipped with the right tools for different home improvements, a HELOC provides financial tools that allow people to withdraw money from their home when they need it. It serves as a flexible credit line that can be used for renovations, for unexpected expenses, or to enhance retirement income. However, just as one should handle tools with care and caution, there are some risks and potential problems that should be taken into consideration when using a HELOC. These may include fluctuating interest rates and the fact that the collateral is the homeowner’s home. With this knowledge, people can use HELOC to their advantage to improve their retirement planning and make better decisions concerning their future.

Sources:

1. National Council on Aging (NCOA). 'What Is a Home Equity Line of Credit (HELOC)? A Guide for Older Adults.' National Council on Aging , 9 Jan. 2024, www.ncoa.org/article/what-is-a-home-equity-line-of-credit-heloc .

2. “How to Use a HELOC Strategically in Retirement.” NerdWallet , 5 Oct. 2022, www.nerdwallet.com/article/mortgages/heloc-strategies-retirement .

3. Fidelity Bank. 'A Retiree's Guide to Leveraging Home Equity in NEPA / Lehigh Valley.' Fidelity Bank , 2024, www.fidelitybankpa.com/retirees-guide-helock-lehigh-valley .

4. 'Can You Get a HELOC in Retirement?' Point Blog , 6 Dec. 2024, www.point.com/blog/heloc-retirement-eligibility .

5. CBS News. 'Is a Home Equity Loan or HELOC Safer for Seniors in 2025?' CBS News , 2025, www.cbsnews.com/articles/home-equity-loan-heloc-seniors-2025 .

How does the Broward Health Cash Balance Pension Plan ensure the financial security of its employees upon retirement, and what are the specific benefit options available to employees who retire or terminate employment with Broward Health? Discuss the implications of choosing a lump sum versus a monthly benefit and how these choices affect overall retirement income.

Financial Security and Benefit Options: The Broward Health Cash Balance Pension Plan provides financial security by offering a defined benefit based on hypothetical account balances. Upon retirement or termination, employees can choose between a lump sum payment or a lifetime monthly benefit. The lump sum provides immediate access to funds, but opting for a monthly benefit ensures a steady income throughout retirement, which could lead to a more stable financial situation over time.

How does the retirement savings plan at Bristol-Myers Squibb Company compare to similar plans in the biotech and pharmaceutical industry, particularly regarding company matching contributions and employee deferral options? What factors should employees consider when deciding how much to contribute to their retirement accounts at Bristol-Myers Squibb Company?

Early Retirement Accommodations: Employees can retire early if they are at least 55 years old and have completed 5 years of vesting service. Benefits received upon early retirement are typically smaller compared to those received at the normal retirement age of 65. The normal form of benefit payment for early retirees is an actuarially adjusted life annuity based on the cash balance account at the time of early retirement(Broward Health_June 201…).

Bristol-Myers Squibb Company offers various retirement plans, including 401(k) plans and non-qualified deferred compensation plans. Can employees elaborate on the differences between these plans and how each one impacts their long-term retirement savings? Furthermore, how can an employee evaluate which plan best suits their individual retirement goals?

Vesting Schedule and Rights: The Broward Health Cash Balance Pension Plan uses a vesting schedule that grants full vesting rights after 5 years of service. Employees with fewer than 5 years of service are not eligible for benefits and forfeit their account balance. Vesting means employees gain the right to their accrued benefits, which become payable when employment ends(Broward Health_June 201…).

Based on the changes in IRS regulations for 2024, how might they affect Bristol-Myers Squibb Company's retirement and savings plans? Are there any new contribution limits or eligibility rules that employees should be aware of, and how can they adapt their savings strategies accordingly?

Role of the Pension Plan Committee: The Broward Health Pension Plan Committee administers the Cash Balance Pension Plan, ensuring compliance with laws and the plan’s financial health. The committee is responsible for investment decisions and approving plan changes, and it ensures that benefits are paid accurately and in a timely manner(Broward Health_June 201…).

What are the implications of taking an early withdrawal from retirement funds at Bristol-Myers Squibb Company, and how does it affect an employee's financial future? Employees should also consider what alternatives to early withdrawal exist within the company's policy framework.

Changes or Amendments to the Plan: The plan can be amended or terminated, but employees' vested rights are protected. Changes do not reduce accrued benefits from prior contributions, and the plan's termination follows a specific order to prioritize benefit distributions(Broward Health_June 201…).

Employees often have questions about post-retirement benefits, especially concerning medical coverage. What policies does Bristol-Myers Squibb Company have in place to ensure continued healthcare coverage for retirees, and what are the eligibility criteria for these benefits?

Recognition of Past Service upon Re-employment: If employees return to Broward Health after a break, their prior service may be recognized depending on vesting and benefit conditions at the time of rehire. Those who were vested before leaving can have their prior benefits restored, and contributions can resume after re-employment(Broward Health_June 201…).

How does Bristol-Myers Squibb Company handle the integration of pension benefits during mergers or acquisitions, and what can employees expect if they find themselves in such a situation? It would also be important for employees to understand their rights and options during these transitional phases.

Beneficiary Designations: Employees can designate beneficiaries to receive benefits if they die before or after retirement. Beneficiaries can receive lump sums or monthly payments, depending on the employee's retirement eligibility. Failure to designate a beneficiary may result in benefits going to the surviving spouse, children, or other family members as per the plan's order of priority(Broward Health_June 201…).

In light of recent company performance, what are Bristol-Myers Squibb Companyâ€™s future benefits projections, especially regarding pension plans? How can employees utilize this information to better plan for their retirement saving strategies?

Interest Credits on Accounts: The interest credits for cash balance accounts are determined based on U.S. Treasury rates, with a minimum annual interest rate. Interest is applied monthly, enhancing the account value and ensuring that employees' retirement savings grow over time(Broward Health_June 201…).

Given that Bristol-Myers Squibb Company has a robust benefits architecture, what specific programs or platforms are in place for employees to seek clarifications on their retirement benefits? How can Bristol-Myers Squibb company employees efficiently navigate these resources to address their individual inquiries?

Challenges in Filing Claims: The process for filing retirement claims involves notifying Broward Health and submitting the necessary paperwork 30 to 60 days before retirement or termination. In case of a denied claim, employees have the right to request a review and appeal, ensuring fair treatment and timely resolution(Broward Health_June 201…).

For employees looking to gain more information about retirement benefits and other related policies, how can they contact Bristol-Myers Squibb Company effectively? What communication methods are recommended to ensure that their questions are addressed promptly and comprehensively? These questions should provide employees with a deeper insight into their retirement planning while encouraging them to explore the benefits offered by Bristol-Myers Squibb Company further.

Contacting Broward Health for Information: Employees can contact the Employee Benefits department at Broward Health to learn more about the Cash Balance Pension Plan. Resources such as retirement counseling sessions and detailed plan descriptions are available to help employees understand their benefits and make informed decisions(Broward Health_June 201…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

In process of terminating U.S. Retirement Income Plan, transferring $3.8 billion of its pension obligations. Previous $1.4 billion transfer to Prudential for 8,000 retirees.

Bristol-Myers Squibb announced a restructuring plan that includes layoffs of approximately 1,200 employees.

Bristol-Myers Squibb offers RSUs to executives and certain employees. The RSUs vest over a three-year period, promoting long-term company performance and employee retention.

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For more information you can reach the plan administrator for Bristol-Myers Squibb at 430 East 29th Street New York, NY 10016; or by calling them at +1 212-546-4000.