If you are planning your retirement from Lockheed Martin in Orlando, you will weigh a pension, a lump sum, and your 401(k) together. These accounts follow different tax rules. The order you take them in can change how much income you keep for years.
What Should a Lockheed Martin Employee in Orlando Do First?
Start by listing every retirement asset in one place: your frozen Lockheed Martin pension, your Salaried Savings Plan 401(k), any deferred pay, and your Social Security estimate. Seeing them side by side, before you pick a retirement date, helps you plan the order in which you draw on each one.
Lockheed Martin Orlando retirement planning pulls these pieces into one plan rather than a stack of separate accounts. Each account has its own rules for taxes, timing, and payout, and the choices interact. A change to one often changes the best move on another.
Why Retirement Planning Looks Different at Lockheed Martin in Orlando
Lockheed Martin runs one of its largest sites in southwest Orlando, off Sand Lake Road. Its Missiles and Fire Control teams, along with Rotary and Mission Systems, employ thousands of engineers and senior staff in the region. Many have spent decades there, so they hold a mix of older and newer retirement benefits.
The company closed its salaried pension to new hires in 2006. It then froze the plan in two steps: pay-based credits stopped at the start of 2016, and service-based credits stopped at the start of 2020. After that, future retirement savings shifted to an enhanced 401(k) with larger company contributions.
If you joined before those dates, you may hold both a frozen pension benefit and a growing Salaried Savings Plan 401(k). One pays out as lifetime income or, in some cases, as a lump sum. The other is yours to invest, roll over, or draw down on your own schedule.
Florida charges no state income tax. That can change how you sequence withdrawals and whether a Roth conversion makes sense in the lower-income years before larger required withdrawals begin.
Source: Lockheed Martin pension change announcements, 2014 to 2020.
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Your Lockheed Martin Pension: Annuity or Lump Sum?
If you hold a frozen pension, you will likely choose how to receive it. A monthly annuity pays you a set amount for life and can include a survivor benefit for a spouse. That steady income lowers the risk of outliving your savings.
A lump sum, where your plan offers one, hands you the full value to invest or roll into an IRA. That gives you control and a possible legacy for heirs. It also moves investment risk and longevity risk onto you, and markets can fall as well as rise.
Neither path is right for everyone. The better fit depends on your health, your spouse, your other savings, and current interest rates, which affect how a lump sum is calculated. Weighing a pension against a lump sum with the real numbers in front of you tends to produce a clearer decision than a rule of thumb.
Rolling over Your Salaried Savings Plan 401(k)
When you leave Lockheed Martin, your Salaried Savings Plan 401(k) does not have to stay where it is. You can often keep it in the plan, roll it into an IRA, or move it to a new employer plan. Each path carries different costs, fund choices, and creditor protections.
A direct rollover into an IRA can widen your investment options and simplify your accounts. It can also affect access to certain plan features and pricing. It helps to understand how a 401(k) rollover works before you move anything.
If part of your account holds Lockheed Martin stock, special rules on net unrealized appreciation, or NUA, may apply. Handled in the right order, those rules can lower the tax on company stock gains, so review them before you sell or roll over.
Coordinating Pension, 401(k), and Social Security
Your retirement income will likely come from three places: your frozen pension, your 401(k), and Social Security. The order you tap them can affect your lifetime tax bill and how long your savings last.
Delaying Social Security can raise your monthly benefit, while drawing from your 401(k) first may open room for Roth conversions in lower-income years. Florida’s lack of a state income tax can make those conversion years more attractive. Required minimum distributions from pre-tax accounts begin in your 70s, so smoothing withdrawals earlier can ease later tax spikes.
A coordinated plan treats these three sources as one income stream.
How Holland Capital Management Works with Lockheed Martin Families
Holland Capital Management is an independent, fiduciary firm. We are paid to act in your interest, not to sell a product. We help engineers and senior staff near retirement read their plan documents, compare pension options, and build a withdrawal plan around them.
This work fits into a broader approach to retirement planning for people in their final working years, and into our guidance for those leaving large employers in employer and government retirement planning. Good Lockheed Martin Orlando retirement planning starts well before your final day at the office.
Our approach follows one idea: Preserve. Strengthen. Grow.™
Getting Started with Holland Capital Management
If you’re evaluating financial decisions in today’s market environment, request a Clarity Call to discuss our planning and investment approach.
Frequently Asked Questions
Does Lockheed Martin Still Offer a Pension in Orlando?
The salaried pension was closed to new hires in 2006 and frozen by 2020. Longtime Orlando employees may still hold a frozen benefit they earned before the freeze, payable at retirement. Newer hires build retirement savings mainly through the Salaried Savings Plan 401(k) and company contributions.
Can I Take My Lockheed Martin Pension as a Lump Sum?
It depends on your plan’s options when you retire. Some participants can choose a lump sum instead of monthly payments, while others receive an annuity only. The right choice depends on your health, your spouse, your other savings, and interest rates at the time.
What Is the Salaried Savings Plan 401(k)?
It is Lockheed Martin’s main 401(k) for salaried staff. It holds your pre-tax or Roth contributions plus company contributions. When you leave, you can usually keep it in the plan, roll it to an IRA, or move it to a new plan. You can read more about building retirement income from accounts like this.
Do Florida Retirees Pay State Income Tax on a Pension or 401(k)?
Florida charges no state income tax, so your pension, 401(k) withdrawals, and Social Security are not taxed at the state level. Federal income tax still applies. This gap can make the years before required withdrawals a useful window for Roth conversions.
When Should I Start Planning My Retirement from Lockheed Martin?
Ideally several years before your target date. Early planning gives you time to compare pension options, adjust your 401(k), model Social Security timing, and manage taxes across accounts. Decisions made close to your last day tend to leave fewer options open.
What Happens to My Lockheed Martin Stock in the 401(k)?
Company stock inside a 401(k) can qualify for special tax treatment called net unrealized appreciation, or NUA. Handled in the right order, it may lower the tax on the gains. The rules are detailed, so review them before you roll over or sell.
Should I Roll My 401(k) into an IRA When I Leave?
It depends on your goals. An IRA can offer more investment choices and simpler management, while staying in the plan may preserve certain features and protections. Compare fees, fund options, and access before you decide either way.
