12 Retirement Planning Mistakes to Avoid as a Boeing Employee
When planning for retirement, making the most of your Boeing employee benefits is crucial. Unfortunately, financial planning is nothing if not complicated. It’s easy to make mistakes.
At TrueWealth Financial Partners, we’re very familiar with the unique advantages Boeing gives its employees — and the many pitfalls they face. To help you get more bang for your buck, here are 12 common mistakes to avoid.
1. Not Using Your Boeing Employee Benefits
The most wasteful mistake you can make as a Boeing employee is to not take advantage of your retirement benefits at all. Boeing provides employees with a full suite of benefits, with the Boeing Voluntary Investment Plan (VIP) as the cornerstone.
These benefits give you a golden opportunity to save, invest, and grow your wealth for retirement. Ignoring that opportunity means leaving free money on the table.
2. Not Maximizing Your 401(k) Match
The Boeing VIP is a 401(k) retirement plan. Using this program, you can invest a portion of your income in various stocks to grow your savings over time. Better still, Boeing will match all your contributions dollar-for-dollar up to 10% of your salary. That means if you invest a full 10%, Boeing will double your retirement savings with no strings attached!
However, many employees fail to take full advantage of this benefit. To avoid that pitfall, be sure to always set aside at least 10% of your salary to invest in the Boeing VIP. The easiest way to do this is to have the contributions automatically diverted from your paycheck.
PRO TIP: The more you earn, the more you can save. As your salary increases, consider raising your contribution percentage to boost your retirement savings.
3. Not Using the Boeing SSP or Mega Backdoor Roth (if Applicable)
The IRS sets limits on how much an employee can invest in their 40(k) in a given year. But as a Boeing employee, you have other options. If you max out your 401(k) contributions you can use the Boeing Supplemental Savings Plan (SSP) or Mega Backdoor Roth program to save even more.
4. Not Diversifying Your VIP Investments
The Boeing VIP lets you invest your 401(k) contributions in a variety of funds, including:
Target date funds
Index funds
Actively managed funds
Each option has its pros and cons. However, the greatest mistake you can make is investing too heavily in any one industry, stock, or asset class. You never want to put all your eggs in one basket.
Instead, you always want to diversify your investment portfolio. That way, even if one asset class or stock does poorly, you can balance it with others that will likely do better.
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5. Overlooking Healthcare Costs
Healthcare costs are often among the highest expenses during retirement. Many employees underestimate the cost of medical care, which may include:
Insurance premiums
Out-of-pocket expenses
Long-term care
Boeing offers retiree medical plans, but it's crucial to plan for these costs effectively. We recommend that you:
Take time to review the retiree medical plans available
Explore options for long-term care insurance to protect your savings from unexpected healthcare costs
Consider investing in a Boeing Health Savings Account (HSA) and/or Flexible Spending Account (FSA)
6. Not Optimizing Your Taxes
Proper tax planning can make a major difference in how much of your savings you get to keep. This means:
Knowing when to make pre-tax or after-tax contributions
Choosing between a lump sum pension payout or monthly payments
Timing your withdrawals strategically to minimize the tax burden
Knowing when to convert traditional 401(k) funds to a Roth 401(k) or Roth IRA
All of these factors (and more) can translate to a lot more (or a lot less) money on hand after you retire. An experienced tax advisor can help you optimize your tax strategy for maximum savings.
7. Neglecting Estate Planning
Retirement planning isn’t just about providing for yourself. You should also consider the future of your family and heirs.
Estate planning ensures your assets are distributed according to your wishes. It’s also helpful for reducing taxes and legal complications for your heirs. Again, the sooner you start making plans with the help of your financial advisor, the better for everyone.
8. Not Counting on Longevity
This may seem like an odd mistake, but it’s more common than you think. In the modern age, people are living longer than ever before. That means you may need your retirement savings to last longer than previous generations. If it doesn’t, you could end up outliving your savings.
To avoid that outcome, make sure you have plans in place to support yourself for many years after retirement — possibly even more than you expect.
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9. Ignoring Inflation
Inflation can erode the value of the dollar —and your savings — over time. It's crucial to factor in inflation when planning for retirement to ensure your savings will maintain their value. Consider investments that tend to outpace inflation, such as stocks or real estate, to help protect your retirement income.
10. Starting Too Late
The sooner you start saving for retirement, the more time your money has to grow. Compound interest can greatly increase your savings over time. If you start too late, you may need to invest a larger portion of your income each year to catch up.
That said, even if you’re already nearing retirement, don’t lose heart. Late is still better than never. Just get started as quickly as possible!
11. Not Adjusting Your Plan
Retirement planning is not a set-it-and-forget-it task. Even if it seems to be going well at first, things could change a few years down the road. The market might rise or fall. Your personal needs and goals may shift.
Periodic reviews with your financial advisor can help keep your retirement plan on track. We recommend reviewing your retirement plans at least once a year and always after major life changes such as a birth or marriage.
12. Trying to Do It Alone
Retirement planning can be complex, and navigating it alone can lead to costly mistakes. A financial advisor can provide expert guidance tailored to your specific needs and goals, helping you avoid common pitfalls and maximize your retirement savings. Financial advisors can help you:
Understand your benefits
Create a diversified investment portfolio
Optimize your taxes
Plan for unexpected healthcare costs
Review and adjust your plan as needed
Working with a professional ensures that you’re making informed decisions, ultimately leading to a secure and comfortable retirement.
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Let TrueWealth Guide You to a Better Retirement
At TrueWealth Financial Partners, we specialize in guiding Boeing employees through the complexities of retirement planning. Our team is dedicated to providing personalized financial advice that caters to your unique needs and goals.
Schedule a free consultation and let us help you navigate your retirement journey with confidence and peace of mind.
Take the first step towards a golden retirement.
Let’s talk!