Blog & News
Financial Planning amid the GE Aviation Workforce Reduction
Rob Lemmons CFP®, CPA, AIF®, CEPA
Wednesday, June 24, 2020
Finding qualified, independent financial advice can be difficult. If you are facing a layoff due to the GE Aviation workforce reduction, we are helping our GE Aviation clients through this transitional period. There are a number of strategies to consider, and below are a few that we are working through with our clients currently.
One of the first major decisions is whether to take the severance package in lump sum or in the form of the IEA (Income Extension Aid Pln), which allows a weekly payment to supplement unemployment to get income potentially up to about 90% of where it was for a 4-6 month period. This option allows you to still be considered an employee of GE and look for another job within the company for 6 months vs being separated from service officially. This obviously has ramifications on income, the pension plan, and health insurance decisions.
Health Insurance - options and considerations
For those who are not 65 and Medicare eligible what options are available to you after separation? Is Cobra the right choice, coverage under a spouse's employer, or is a private insurance option best? If you are close to 65, bridging the gap until turning 65 can have its challenges.
There are a number of options and strategies available to you once you separate from service and are no longer a GE employee. What are the benefits of maintaining the plan at Fidelity or should you roll it over to an IRA? What are the tax implications?
GE Pension Plan
Defined Benefit Plan and Personal Pension Account (PPA) and Voluntary Pension Account (VPA). There are a number of options to you with the pension plan and VPA/PPA. The regular defined benefit plan offers single life and survivor benefits. The VPA/PPA offers a similar pension payout or has the option to roll it over to an IRA.
Taking the lump sum on the PPA/VPA can allow for long term wealth accumulation and possible Roth IRA conversions.
Stock Options - Non Qualified and Restricted Stock Units (RSU's)
There are two components to GE's stock option plan. Upon retirement at age 60 or greater with 5+ years of continuous service, all restrictions on outstanding RSU's will immediately lapse and all outstanding grants will vest.
At Total Wealth Planning we help our clients every day answer these important and at times stressful questions. Who's helping you?
Financial planning is complex and requires the guidance of a trusted and experienced advisor, such as a fee-only Certified Financial Planner™
(CFP®), who plans comprehensively, and with a complete understanding of your particular concerns and goals in life.
For more information about the financial planning strategies we utilize, please visit us at www.twpteam.com or contact directly Rob Lemmons,