As a fiduciary financial advisor in Hickory, Holland Capital helps longtime manufacturing employees decide what to do with a buyout, a severance offer or a 401(k) when their job changes late in a career. We work with clients in Hickory by video and phone, and meet in person by appointment at the Regus center in Hickory.
The offer came with a deadline. The decisions behind it do not have to be rushed.
Hickory has deep roots in manufacturing, from furniture and hosiery to fiber optic cable. Late in a long career, a plant closing, a new owner or a voluntary buyout can put a package in front of you with a date to sign by.
The package may include severance, a pension choice, retiree health options and a decision about your 401(k). Each one has tax consequences.
Whether to sign is the first decision. What you do with the money afterward matters just as much.
Severance and a Buyout
Severance is taxed as wages. A large payment in one year can push part of your income into a higher bracket. If the payment can be split across two tax years, the total tax may be lower.
If the package includes a pension, you may have to choose between a lump sum and a monthly check. A monthly check is paid for life. A lump sum can be rolled into an IRA and invested, but it has to last on its own. We compare the two against your other income before you choose.
If you are not ready to retire, the severance may also need to cover the time until your next job, including health coverage.
Your 401(k) When the Job Ends
The age-55 rule helps here. Leaving a job during or after the calendar year of your 55th birthday lets you withdraw from that job’s 401(k) without the 10% penalty. Move the money to an IRA, and that access is lost, so a quick rollover is not always best.
If the 401(k) holds company stock, special tax treatment may apply before a rollover. Our guide on what to do with a 401(k) after a layoff covers the choices.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Investing After the Package
A severance check or a pension lump sum can be the largest single amount you have ever received. There is no rush to invest it.
Start by setting aside cash for taxes, health coverage and living costs until your next paycheck or Social Security begins. We then invest what remains according to a written investment policy statement covering the stock and bond balance and each account’s job.
Our leaving a job guide walks through the rollover steps.
Following a job change, our investment management invests for the new plan, not the old paycheck.
How We Work with Clients in Hickory
Holland Capital Management is an independent registered investment adviser and a fiduciary. M. Chad Holland, CFA, CFP® works directly with clients and is responsible for the planning and advice.
Bring the offer letter or package summary, the signing deadline, recent 401(k) and pension statements and an estimate of your Social Security benefit.
We help you compare what the package provides, identify any choices that cannot be undone and focus on what must be decided before the deadline.
The first conversation is free. If there is work worth doing after that, we will define the scope and cost before you decide whether to move forward.
Holland Capital is based in Charlotte. If you are looking for a fiduciary financial advisor in Hickory, we meet by appointment at the Regus center at 1985 Tate Boulevard in Hickory, and handle shorter check-ins by video or phone. Holland Capital does not maintain a branch office in Hickory.
We work with clients throughout North Carolina. You can see the other North Carolina communities we serve here.
Our what we do page explains how a planning engagement works.
RETIREMENT ENGINEERING™
The Order Matters
Five retirement decisions and why timing matters.
Frequently Asked Questions
Should a Fiduciary Financial Advisor Review My Severance Package?
Holland Capital acts as a fiduciary when providing financial planning and investment advice. Before you sign, we look at the severance, pension choice, health coverage and 401(k) together.
Our fee applies if you roll a pension lump sum or 401(k) into an account we manage. We say so, and we show the option of leaving the money where it is.
Should I Take the Pension as a Lump Sum?
It depends on your health, your other income and whether a spouse relies on the pension. A monthly check removes the risk of running out. A lump sum gives you control but puts the investment risk on you.
The choice is usually permanent, so we compare both before the deadline.
Is There a Place to Meet in Hickory?
Yes. Meetings are by appointment at the Regus center at 1985 Tate Boulevard.
Phone and video work for the follow-up calls in between.
Photo: Tylerg / Wikimedia Commons / CC BY-SA 3.0, cropped.
