When I went through a major layoff as a twenty-something, my Dad didn’t hide his concern about my career choice. Advertising, I told him, was simply not going to be as secure as his life as a tenured professor. When I went on to secure a job at the regional phone company, he was delighted. You can work there until you retire, he said, and earn a good pension. Instead, after a few more career changes I’ve collected an assortment of pension plans and 401(k)s. Now I’m my own boss, but I can still be boss of my retirement accounts.
While the dream of many in the Greatest Generation was a lifetime career at a single company, younger generations think differently. Millennials and Xers see job change as a way to stay fresh and keep their career on a positive trajectory. Baby Boomers like me, out of desire or circumstance, proudly list multiple jobs on our resumes. All this mobility makes the one-page resume as old-school as the vellum it’s printed on.
After a career of job-hopping, it’s easy to have retirement accounts and pension plans strewn across multiple companies. And it’s tempting to just leave them there. But you may have more choices than you think when it comes to making decisions about your retirement funds. Of course, choices are fun when it comes to donuts, but they can be too much when you’re busy managing a career.
What to do while you’re still working
You’re already doing the right thing if you’ve signed up for your company’s retirement plan and are taking advantage of the company match. If you’re lucky enough to participate in a pension plan, it’s a good idea to know how the benefit works and how many years of service you have or need. It’s also important that you educate yourself about the plan(s) and stay informed of any changes. If the company offers investment options, you don’t have to feel stuck with your initial choice. Several years after leaving my job at the phone company, and after it had changed hands twice, I realized my portfolio was heavily weighted with a single stock. Some diversification was in order.
If you’ve already accumulated several retirement accounts, you’ll want to look at them from a big-picture perspective. It’s important to see how they work as an overall portfolio, not just as separate accounts or funds. In some cases it may be beneficial to consolidate accounts so they’re easier to manage both now in the distant future. It’s not uncommon for people to accumulate just a few thousand dollars at a company before moving on to the next big opportunity. That money can often be rolled over and combined into another account.
But this all seems so very complicated, and it might just convince you that doing nothing is fine for now. In fact, there really is no right answer for what to do with your accounts. What you decide to do while you’re still working depends on your current circumstances and your plans for the future. That’s why working with a financial planner makes sense. They will take it all under consideration as they customize your investment strategies.
What to do as you approach retirement
Whatever retirement looks like for you, whether it’s pursuing personal interests or launching another career, you’ll want to get proactive about your retirement accounts well in advance. There are often decisions to be made as you reach a certain age or longevity at your company. Even before you decide on a retirement date, you can learn about what your plan (or plans) offer and what restrictions they may have. Plan administrators should be available to walk you through your options and the paperwork.
Again, what you choose to do with your retirement plans depends on a long list of factors that are personal to you. Your financial planner will help you consider your overall financial picture, your family situation, and your risk tolerance. Most important, they will take time to understand your goals for the future to help make sure your plan is aligned with your dreams.
After working at several companies, supporting a family, going through a divorce, and choosing to work for myself, my financial picture is definitely complicated. But with good advice and proactive planning I’m happy to be my own boss – and the boss of my retirement.
Questions to ask yourself:
• If you’re still working, are you taking full advantage of your company’s retirement plan?
• Do you know the rules and restrictions of your retirement plans?
• Do you have a clear picture of when you want to retire and what that will look like?
Action Steps:
• Involve your family in your retirement plans to make sure you all share the same vision and expectations.
• Be sure you have access to information about all your retirement accounts. If you’ve “left behind” an account at a previous employer, contact their plan administrator.
• Set goals that are realistic to where you are today. You can always change them as you continue working with your financial planner over the years.
As we near the end of 2022 with the markets continuing to adjust to painfully high inflation, rate increases by the Fed, and worries of an impending recession, we remind our clients that staying the course is critical in achieving long-term goals. While market downturns can be disconcerting, they eventually reverse course and can also provide rebalancing opportunities, an important and ongoing part of the financial planning process.
We encourage you to contact your planner if you are due for a portfolio review or have questions regarding the markets or your financial plan. Please contact us at 206.217.2583 or
Liz is a Late Boomer in the sandwich generation who started an independent writing and brand consulting practice after years as a senior marketing executive. She lives in Seattle, Washington. Her mother lives nearby and her daughter comes home during college breaks.
The foregoing content reflects the opinions of Liz Behlke and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.