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WestRock Insights Navigating the Buy Borrow Die Wealth Strategy

'WestRock employees nearing retirement can benefit from understanding wealth-building strategies, such as the 'Buy, Borrow, Die' method, to enhance their financial planning, leveraging tax-efficient wealth transfer tools like in-service withdrawals to optimize their retirement strategies.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'WestRock employees nearing retirement should explore advanced wealth management strategies like the 'Buy, Borrow, Die' approach to maximize their assets and leverage tax-efficient tools, ensuring their retirement planning aligns with long-term financial goals.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

How the ultra-wealthy accumulate and grow their wealth tax-efficiently through strategies like the 'Buy, Borrow, Die' method.
The role of leveraging assets for borrowing and how this reduces taxable events while enabling substantial spending.
Implications for WestRock employees and how they can apply similar financial strategies to potentially improve their retirement planning.

Against the current financial landscape, WestRock employees can learn from the strategies of the wealthiest Americans - buy, borrow, die. This creates wealth accumulation, big spending, and a tax-efficient transfer of large assets to future generations. Unlike ordinary employees who are taxed on earnings as they are made, the ultra-wealthy build most of their wealth through the appreciation of their assets - which is usually untaxed until the assets are sold.

How Wealth Grows Among the Ultra-Wealthy.

Start with asset acquisition. And the ultra-wealthy - unlike most who earn via salaries - build wealth by buying appreciated assets. It's a strategy Warren Buffett and Elon Musk have used - paying themselves little or no salary while building their fortunes by owning stock in their companies. Together the wealthiest 1% of Americans have nearly US $23 trillion in assets - an example of how rich wealth can be with smart asset management.

Now leverage those assets for loans - big spending with low taxable events - etc. Ainsi, Larry Ellison and Elon Musk have pledged their stock holdings to fund lifestyles including properties and yachts worth millions of dollars. While this is more common for the super-rich, by 2022, more than USD 1 trillion had been borrowed by the broader wealthy class.

The Effects of the 'Buy, Borrow, Die' Strategy on Estate Planning.

The final step is when the asset holder dies. The stepped-up basis tax provision means heirs can inherit assets at death without paying taxes on the appreciation that occurred during the asset holder's lifetime, which helps with outstanding debts, including any prior loans. Despite a potential 40% estate tax on large inheritances, legal strategies and trusts can ease tax burdens.

What That Means for WestRock Employees Approaching Retirement.

Experienced WestRock pros may find these wealth management principles useful in planning for retirement or making investment decisions. This strategy identifies key differences in tax treatment across income groups which reinforces the debate over possible reforms.

For WestRock employees approaching retirement, the same tax-efficient wealth transfer strategy that utilizes assets may also apply to financial planning tools. For example, the WestRock 401(k) plan allows in-service withdrawals for employees 59 1/2 and older, allows access to funds before retirement, and allows for flexible planning.

Articles you may find interesting:

Sources:

1. Lowrey, Annie. 'Buy, Borrow, Die.' The Atlantic , 17 Mar. 2025, pp. 1-3.
Explores how the ultra-wealthy use this strategy to minimize taxes, offering retirees insights into wealth preservation.

2. Mitchell, Tazra. 'How Wealthy Households Use a 'Buy, Borrow, Die' Strategy to Avoid Taxes.' DC Fiscal Policy Institute , 29 Apr. 2024, pp. 2-4.
Highlights tax advantages of the strategy, showing retirees how to manage wealth and defer taxes.

3. Hirshman, Susan. 'Leveraging Your Assets to Manage Your Wealth.' Charles Schwab , 20 Mar. 2023, pp. 3-5.
Discusses borrowing against assets for liquidity without triggering taxes, helping retirees manage finances.

4. 'The Buy, Borrow, Die Tax Strategy Explained.' Physicians Thrive , 15 Sept. 2023, pp. 4-6.
Explains how retirees can use this strategy to avoid capital gains taxes and transfer wealth.

5. 'Tax-Aware Borrowing.' J.P. Morgan , 10 Oct. 2023, pp. 5-7.
Outlines tax-aware borrowing strategies that can reduce taxes and increase cash flow for retirees.

How does the WestRock Company Consolidated Pension Plan specifically calculate the Normal Retirement Benefit for its employees, and what considerations should employees be aware of regarding the Final Average Pay calculation used by WestRock Company?

Normal Retirement Benefit Calculation: The WestRock Company calculates the Normal Retirement Benefit based on the employee's Final Average Pay. This is defined as the average of the employee's highest five years of earnings over the last ten years of employment before termination. Earnings included in the Final Average Pay are most wages, bonuses, commissions, and amounts deferred under the company’s 401(k) plan. Employees should be aware that earnings after December 31, 2015, are excluded unless they qualify under the Rule of 75(WestRock Company_Issued…).

What are the specific eligibility requirements for the Disability Retirement Pension under the WestRock Company plan, and how does this differ for Legacy Mead and Legacy Westvaco participants within the WestRock Company workforce?

Disability Retirement Pension Eligibility: To qualify for a Disability Retirement Pension, an employee must have earned at least five years of Vesting Service and be deemed "totally and permanently disabled" according to specific criteria. Legacy Mead and Legacy Westvaco participants are subject to special rules detailed in the Legacy Supplement. Legacy Mead employees must apply separate criteria from Legacy Westvaco employees(WestRock Company_Issued…).

In what ways can employees at WestRock Company manage and maximize their Vesting Service to ensure they receive the full benefits from the companyâ€™s pension plan, particularly for those with interrupted service or re-employment?

Vesting Service Maximization: WestRock employees can manage their Vesting Service by ensuring that they complete at least five years of service, which guarantees their right to pension benefits. Employees with interrupted service can still receive credit for Vesting Service if they return within five years. Additionally, employees who leave and return within a year will receive credit for the time they were absent(WestRock Company_Issued…).

How does the WestRock Company handle the transition of benefits for employees who transfer between different positions within the company, and what impacts could this have on their eventual retirement benefits?

Transfer Between Positions: When WestRock employees transfer between different positions, their retirement benefit is calculated based on the greater of two methods. The first method calculates the benefit accrued at each position separately, while the second method applies the total benefit service across positions. Vesting Service is always combined, regardless of location or position(WestRock Company_Issued…).

How does the WestRock Company plan ensure that pension benefits are protected, particularly through the Pension Benefit Guaranty Corporation (PBGC), and what should employees know about their rights and guarantees under this insurance?

Pension Benefit Protection (PBGC): The WestRock Pension Plan is insured by the Pension Benefit Guaranty Corporation (PBGC). This federal insurance guarantees that employees will receive their vested pension benefits even if the plan is terminated. Employees should understand that PBGC coverage has limits, and benefits might be reduced under certain circumstances(WestRock Company_Issued…).

What are the consequences for WestRock Company employees who choose to withdraw from their pension plan or to rollover their benefits upon retirement or termination? How can they navigate these options effectively to avoid penalties?

Withdrawals and Rollovers: Employees can withdraw or roll over their pension benefits upon retirement or termination. Lump-sum withdrawals may be subject to taxes unless rolled over into a qualifying retirement account. Employees should consult the WestRock Benefits Center to avoid penalties and ensure compliance with federal tax regulations(WestRock Company_Issued…).

How does the WestRock Company maintain compliance with federal regulations and best practices under ERISA, and what specific rights do employees have concerning their pension benefits?

ERISA Compliance: WestRock complies with the Employee Retirement Income Security Act (ERISA), ensuring that employees' pension rights are protected. Employees have the right to receive information about their benefits, act prudently, and enforce their rights through the claims and appeals process outlined in the plan(WestRock Company_Issued…).

What resources are available to employees of WestRock Company for understanding their benefits under the Consolidated Pension Plan, and how can they utilize these resources to ensure they make informed decisions about their retirement?

Resources for Understanding Benefits: WestRock provides employees access to the WestRock Benefits Center, where they can obtain information on their pension plan. Employees are encouraged to review the Summary Plan Description and consult with the Benefits Center for clarification on their benefits and to make informed retirement decisions(WestRock Company_Issued…).

How will the integration of employee benefits from various company acquisitions impact current staff at WestRock Company, and what steps is the company taking to communicate these changes effectively to its employees?

Impact of Acquisitions on Benefits: WestRock has acquired various companies over time, and employees from these acquisitions may have different pension rules applied to them. WestRock takes steps to integrate these employees and communicates any changes through the WestRock Benefits Center. Special rules may apply based on the previous employer’s pension plan(WestRock Company_Issued…).

How can employees of WestRock Company get in touch with the WestRock Benefits Center to seek clarification about the Summary Plan Description, and what are the best practices to follow when requesting information regarding their pension plan?

Contacting the Benefits Center: Employees can contact the WestRock Benefits Center for clarification on the Summary Plan Description. Best practices include having detailed questions prepared, reviewing the SPD in advance, and requesting copies of documents or forms that clarify specific aspects of their pension plan(WestRock Company_Issued…).