Boeing Executive

How do I integrate my executive benefits to better prepare for retirement?

Situation Overview

As a successful executive at Boeing, Melodie wanted to integrate her executive benefits with her goal to retire in five years.

Assessment

Melodie mentioned her concerns to a colleague, who referred her to Capital Planning. Capital Planning has worked with Boeing executives since 1983, has extensive knowledge of the executive benefit plans, and understands the associated tax implications. The initial steps of the process began with an Executive Benefits Assessment to address her primary concerns.

  • Boeing stock is a high percentage of her portfolios. How should she manage the risks of a single stock concentration and the potentially high tax consequences?
  • How can she integrate her other incentive compensation plans with her retirement goals?
  • How does she reinvest the proceeds from her executive compensation?
  • What questions should she be asking about her executive benefits?

Outcome

Melodie's financial advisor led her through the wealth planning process specifically designed for Boeing executives, which included a deep review of her executive compensation, including salary and annual incentive, long-term incentive plans, pension elections, deferred compensation plan, supplemental benefit plan, and the VIP. In addition, Capital Planning took the time to understand her unique circumstances, including goals, family dynamics, and concerns.

Vision & Goals

Capital Planning assisted Melodie in clarifying her vision and goals for retirement, bringing more insight into prioritizing her time and resources.

Retirement Feasibility

Taking into account her inflation assumptions, income sources, expense estimates, and investment capital, a Retirement Feasibility Analysis was prepared. Several scenarios were tested and reviewed with Melodie. The analysis was structured to integrate her executive benefit payout schedules, which provided helpful insights. A plan was established to prepare for her retirement in five years.

Executive Benefit Strategy

Melodie's executive benefits and incentive compensation plans were reviewed, and action plans were set to align each program with her retirement plan. Careful consideration was given to the inherent risks of owning a significant amount in Boeing stock and the associated tax consequences. The plan also addressed the level of income from pension, payouts from deferred compensation and supplemental benefit plans, and how that may impact decisions related to other incentive plans.

Investments

Melodie plans to roll over her VIP to an IRA account at retirement. In the meantime, her current VIP asset allocation was updated to better reflect her investment objectives. Her income needs from her VIP plan would be minimal until age 70 because of her pension and deferred compensation plan income. In addition, Melodie took advantage of a unique planning opportunity, Her VIP after-tax contributions were rolled over to a ROTH IRA as an in-service withdrawal with no tax penalties.

Integrated Wealth Plan

Melodie's wealth plan integrated the complexities of her executive benefits with her retirement objectives. She better organized her financial records and updated her insurance, tax, and estate plans to prepare for her new stage of life.

Real Life Solutions are for educational purposes and are not actual clients. These case studies are based on similar circumstances experienced by our clients. To learn more about our process, see Investment Management Services and Wealth Planning Services.

Deliverables

Proactive Wealth Management

Melodie implemented Capital Planning's wealth planning services to address the eight key components of her financial life:

  • Goals & Objectives
  • Cash Flow Planning
  • Compensation & Benefits
  • Investment Management
  • Tax Planning
  • Risk Management
  • Estate Planning
  • Wealth Administration

Executive Benefits - An Executive Benefits Strategy was developed to meet Melodie's goals. It will be monitored over the next five years in preparation for retirement with the goal of minimizing taxes, coordinating income payouts, and eliminating the guesswork.

Experienced Advisory Team - Melodie's proactive team at Capital Planning is led by a seasoned financial advisor and supported by a dedicated client service associate. Other team members are available, who specialize in financial advising, portfolio administration, and investment research. Regular reviews will be conducted to make adjustments and update Melodie's wealth plan.

Events

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