The Boeing Company Employees: Do NOT Believe These 6 Retirement Myths!

During our 30+ years helping retirees, the majority have been very excited to start the planning process. However, some have been surprised to find out our recommendations differ from what they have heard elsewhere.

This is a result of the abundance of false information that is out there. We have a legal duty to act in your best interests as fiduciaries at all times. So, we can tell you achieving the retirement you desire is not going to happen if you’re sidetracked by myths and false information.
We want to dispel the top six retirement fallacies that workers at The Boeing Company may have heard. Our mission is to assist you in creating the retirement of your dreams, starting right now.

Myth #1: If I receive a pension, I do not have to make any decisions regarding my pension.

In the event that The Boeing Company provides you with a defined-benefit plan, the firm bears primary responsibility for your pension. But when you retire, it doesn't mean you sit back and wait for a check to arrive in the mail. You need to make some important choices.

Employees who are provided a pension have the option to convert it into a lump sum payment that can be converted into an Individual Retirement Account (IRA) and thereafter managed by the retiree, or they can choose to receive a monthly distribution similar to a traditional pension.

So, monthly or lump-sum pension?

Each payout has advantages and disadvantages of its own. Selecting the choice that is best for you depends on a number of things. Selecting the choice that is best for you depends on a number of things. It is best done with the help of a professional, who can incorporate all aspects of your financial life – Social Security, 401(k), real estate, and inheritance into your decision.

Further, married The Boeing Company employees may have survivor benefit options to consider. You may be eligible for more than one survivor choice for your monthly pension upon retirement; however, these possibilities are restricted to spouses who meet certain requirements.

Myth #2: If I receive a pension from The Boeing Company , Social Security becomes less important.

Social Security will likely be one of your primary sources of retirement income. And just like your pension, you should carefully consider how best to use it based on your personal needs.

The age at which you file for Social Security affects how much your benefit will be. When you reach your entire Retirement Age—66 or 67, depending on your birthdate—you can start receiving your entire Social Security retirement income. However, you can start claiming a permanently reduced benefit at age 62. If you wait until you are 70 years old to start receiving Social Security, your payment will increase by up to 8% annually. If you begin at age 62, the payout will be 76-77% lower than the benefit at age 70.

In the end, you should make a decision based on more than just when you can earn the largest Social Security payout; consider things like your other sources of income, marital status, and health.

Myth #3: When I retire from The Boeing Company doesn’t matter

No, no, no. When you retire has a major effect on the quality of your retirement.

To start, one of the main components used to calculate your pension is the number of years of service. In general, your pension will increase with the length of time you stay at The Boeing Company. Interest rates also have an effect on your pension because they change. Lump-sum pension payouts rise in response to rate reductions and vice versa.

Plus, The Boeing Company retirement benefits are not set in stone. They are subject to change. For example, the significant changes made to The Boeing Company’s pension calculation, health care subsidies and retiree health insurance.

You may find that it is more financially advantageous to retire sooner or later than your desired retirement date.

Myth #4: The Boeing Company stock is a good investment

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Something The Boeing Company employees should be aware of is that we commonly see employees invest an excessive amount of their 401(k) in their company’s stock. While it can be rewarding to own a piece of a respected company, it may be risky from a retirement planning perspective.

First of all, a single company's performance becomes crucial for the majority of your financial life. This comprises your take-home pay as well as retirement benefits from your 401(k) and pension plans offered by The Boeing Company, if applicable. It's dangerous to have so much of your financial security invested in one company. Second, compared to a mutual fund or the entire stock market, a single stock may be riskier and more volatile. Thus, you should anticipate a higher degree of volatility in your investment return the more The Boeing Company stock you own in your 401(k).

It’s more appropriate to diversify the investment choices in your The Boeing Company 401(k) account (If The Boeing Company offers you a 401K). That means selling your company stock and investing in mutual funds. The right mix of funds depends on your specific needs, goals and level of risk you’re comfortable with.

Myth #5: It’s better to leave my 401(k) with my company.

Upon leaving The Boeing Company, you may leave some or all of your savings in your The Boeing Company 401(k) account (If this is offered to you). However, there are a variety of benefits to rolling over your 401(k) to an Individual Retirement Account (IRA). These include greater investment choices, greater withdrawal flexibility, more withholding options, and professional management by an advisor of your choosing.

When the rollover is done correctly, no tax is due. Tax withholdings are one area of your 401(k) where there is no flexibility. There is a necessary 20% federal tax and any applicable state taxes associated with each withdrawal.

Myth #6: Medicare will cover my medical expenses

Health care is typically one of the largest retirement expenses for most people. You may make informed plans and prevent significant out-of-pocket expenses that can jeopardize your retirement by taking the time to carefully consider your options.

Once you turn 65 you are Medicare-eligible You and your Medicare-eligible dependents are required to enroll in Medicare Part A (hospital benefits) and Part B (doctor benefits). These two parts cover about 80% of health care benefits for individuals, so it’s important to consider your supplemental coverage options.