Financial Planning for Aerospace Employees
Helping employees of aerospace companies gear up for retirement
Financial Planning Taking You Toward Retirement. . . And Beyond
Approaching retirement means considering many daunting and complex possibilities. In a way, the complexities and unknowns mirror a lot of the work being done in the aerospace industry. And upon the discovery of truly retiring, many people’s lives change dramatically.
At Luminary Financial Advisors, our focus is helping employees of aerospace companies like Lockheed Martin, SpaceX, and Blue Origin, and public sector employees of NASA hone in on the solutions for their retirement equation. Your work is already challenging enough, and retirement doesn’t have to be a mission you fly alone.
Why a Financial Planner Specializing in the Aerospace Industry?
There are hundreds of thousands of financial advisors. So what separates me from all of them? Why not work with just any financial advisor? I liken it to hiring a lawyer. Lawyers practice all kinds of law, and a really good lawyer in one field doesn’t mean they have expertise in another. It’s the same with working with Luminary Financial Advisors. We put all our energy into Aerospace employees, giving us unique insights into specific aerospace companies and their benefit packages, so we can put you on the fast track to retirement success.
- >In-depth knowledge of aerospace benefits
- Specific focus on aerospace employees within 5 years of retirement
- In tune with common financial obstacles faced by employees of NASA, Blue Origin, and SpaceX
- Flexible to serve you, whether you work in Space Coast, Houston, or Jet Propulsion Labs
Aerospace Companies We Commonly Work With
The aerospace industry is expansive, with new companies constantly coming up on the horizon. These are some of the companies we commonly work with, but by no means is it an exhaustive list. Even if you don’t see yours listed, we’d encourage you to reach out.
- Lockheed Martin
- Blue Origin
- SpaceX
- NASA
- Boeing
- L3Harris
- Northrop Grumman
- And others
Aerospace Retirement Planning Case Studies
While working in the aerospace industry is a common thread that ties many of my clients together, there is a multitude of potential planning opportunities in the universe of the aerospace world. Two companies may both build rockets. But that doesn’t mean the retirement plans for employees of those two companies will be similar. In fact, they might vary in some significant ways.
Though I work with aerospace employees around the U.S. who work for any number of companies, the examples below focus on a few of the key players in the industry and some common obstacles faced by employees of Blue Origin, Lockheed Martin, and NASA as they look toward retirement. These are only meant to be examples and shouldn’t be applied as advice for your specific situation.
Real-World Examples of How We’ve Helped Aerospace Employees
Blue Origin: Planning Around the Complexities of Aerospace Investments
Meet Eleanor, a dedicated Senior Manufacturing Engineering Manager at Blue Origin with a rich history of working at various aerospace firms. As she stands 5 years away from retirement, Eleanor isn’t just looking at her own future, but that of her family. Married with two children on the brink of college graduation, both she and her husband are eagerly anticipating the next chapter of their lives. With multiple job transitions in the aerospace sector, Eleanor has accumulated several 401(k) accounts, making her financial landscape a bit complex.
Strategies Implemented:
1. 401(k) Consolidation:
Recognizing the challenges of managing multiple 401(k) accounts, we introduced Eleanor to the benefits of consolidation. By merging her accounts, she could get a clearer picture of her investments, reduce potential fees, and streamline her retirement planning.
2. Unified Retirement Planning:
We emphasized the importance of viewing Eleanor and her husband’s retirement accounts as part of a cohesive whole. By aligning their investment strategies and ensuring both accounts were managed with their collective goals and risk tolerance in mind, they could optimize returns and ensure financial harmony.
3. Maximizing Retirement Contributions & Backdoor Roth Conversions:
We recommended that both Eleanor and her husband maximize their contributions to their respective retirement accounts. Additionally, they were introduced to the concept of backdoor Roth conversions—a strategy that allows individuals to contribute to a Roth IRA even if their income exceeds the standard limits by first contributing to a traditional IRA and then converting it to a Roth IRA.
4. Distribution Strategy in Retirement: As retirement approaches, it’s crucial to have a plan for how to draw down savings. We worked with Eleanor and her husband to establish a distribution strategy that ensures a steady income stream in retirement while minimizing tax implications. This involved determining the right mix of withdrawals from tax-deferred, tax-free, and taxable accounts, and setting up systematic withdrawals to cover their anticipated expenses.
Outcomes Achieved:
With our guidance, Eleanor and her husband have a comprehensive retirement plan in place. From consolidating 401(k) accounts to setting up a unified investment strategy and a well-thought-out distribution plan, they are poised for a retirement filled with financial stability and the freedom to enjoy their post-working years to the fullest.
Lockheed Martin: Structuring Assets and Maximizing Company Benefits
Introducing David, a seasoned Project Manager at Lockheed Martin with over 25 years of experience. As he nears retirement, David is keen on ensuring that he fully leverages the benefits provided by Lockheed Martin and structures his assets in a way that ensures long-term financial security for him and his family.
Strategies Implemented:
1. In-Service Withdrawals & Mega Backdoor Roth Conversions:
After maxing out his 401(k) contributions, David, with the guidance of his advisor Warren, utilized the mega backdoor Roth strategy. This allowed him to contribute additional post-tax funds to his 401(k) and then convert them to a Roth IRA for tax-free growth and withdrawals in retirement. Warren emphasized this advanced strategy to optimize David’s retirement savings and achieve greater tax efficiency.
2. Maximizing Lockheed Benefits:
Lockheed Martin offers a suite of benefits, and Warren ensured David was maximizing each one. From optimizing contributions to Lockheed’s 401(k) match program to understanding and leveraging the nuances of the company’s health and wellness benefits, every aspect was meticulously reviewed and utilized.
3. Tax Diversification:
Beyond just investment diversification, Warren emphasized the importance of tax diversification. By strategically allocating investments across taxable, tax-deferred, and tax-free accounts, David was positioned to manage and potentially minimize tax liabilities in retirement effectively.
4. Insurance and Medicare Guidance:
Warren provided David with comprehensive guidance on navigating Medicare, ensuring that he was well-informed about the various parts and plans available, and how they could best serve his healthcare needs in retirement. Additionally, Warren evaluated David’s existing life insurance policies to determine their continued relevance and potential adjustments. Long-term care insurance was also discussed, exploring options to protect against potential high costs in the future.
Outcomes Achieved:
Thanks to Warren’s comprehensive approach, David is not only maximizing the benefits offered by Lockheed Martin but also ensuring a robust financial foundation for his retirement. The strategies employed, from the mega backdoor Roth conversions to a focus on tax diversification and comprehensive insurance guidance, have equipped David with a well-rounded financial plan. As he looks ahead to his retirement years, he does so with confidence, knowing he’s well-prepared for whatever comes his way.
NASA: Navigating Governmental & Public Service Aspects
Meet Steve, a passionate 58-year-old Safety Program Manager at NASA. For over three decades, he has held numerous positions at NASA ranging from Quality Specialist to Construction Safety Manager to his current position. As he approaches retirement, Steve is keen on ensuring he sails smoothly into this new phase of life, with a particular focus on maximizing his well-earned government pensions and benefits.
Strategies Implemented:
1. Government Pension Optimization:
Together, we embarked on a journey to unravel the intricacies of federal pensions. We explored the benefits of the Federal Employees Retirement System (FERS) and how Steve could leverage its three components: the Basic Benefit Plan, Social Security, and the Thrift Savings Plan. By understanding the interplay of these components and ensuring Steve’s contributions were maximized, we positioned him to receive the most substantial pension benefits possible.
2. Tax-Efficient Withdrawal Plans:
Retirement is a time for relaxation, not tax worries. Recognizing this, we introduced the strategy of Roth conversions. By converting a portion of his traditional TSP to a Roth TSP, we aim to spread out the tax burden, allowing Steve to enjoy tax-free withdrawals in retirement. This forward-thinking approach ensures Steve’s hard-earned savings aren’t heavily taxed down the road.
3. Asset Allocation Using the Bucketing Strategy:
To ensure Steve’s financial stability throughout retirement, we employed the bucketing strategy for asset allocation. This approach divides assets into three specific “buckets”:
• Bucket 1: Short-term assets for immediate expenses (1-2 years). This includes liquid assets like cash and cash equivalents.
• Bucket 2: Mid-term assets for expenses in the next 3 years. Comprising of bonds and bond funds, this bucket aims for stability and moderate income.
• Bucket 3: Long-term assets for the rest. Focused on equities and other growth-oriented investments, this bucket is designed for capital appreciation.
By allocating assets in this manner, Steve can draw from Bucket 1 for his immediate needs, while Bucket 2 provides a safety net for the intermediate years, ensuring he doesn’t face liquidity crunches. Bucket 3 then provides for the growth that he and his family will count on throughout their retirement.
Outcomes Achieved:
Thanks to our collaborative efforts, Steve is all set for a retirement that’s as stellar as his career. He’s optimized his government pension benefits, has a tax-savvy withdrawal plan in place, and boasts a well-structured asset allocation based on the specified bucketing strategy. Here’s to many more years of gazing at the stars, but this time, with the added comfort of financial security!
Common Retirement Building Blocks for Our Clients
Government Benefits
Working for the government often carries robust benefits. But those benefits need to be leveraged properly to make all of those years worth it. Knowing the impact of retirement timing is key.
Public & Private Pensions
Regardless of the sector you’re in, there’s a good chance your retirement is centered around a pension. Our clients often need guidance on when to retire and what pension option to choose.
Stock/Equity Compensation
Equity compensation is its own beast, especially when working for companies with a relatively short history. How do you balance your retirement goals with a large concentration in one stock?
Retirement Planning Built On Your Best Interests
Hi there, I’m Warren Burger, and I focus specifically on helping aerospace employees retire with confidence. I spent 27 years on Wall Street, but I knew there was something more I could be doing with my skills to impact people instead of contributing to the bottom line of organizations.
So a few years ago, I made the leap to becoming a financial advisor. And let me tell you, the clients I’ve had the privilege of working with during that time have made the career change incredibly worthwhile.
Because of my previous experience with all the big financial institutions, I fully understand how often these larger companies put their own interests and profit margins ahead of the people they serve. That was a driving force in joining the financial advising world—to help be a catalyst for change that reversed that focus.
As a fee-only, fiduciary financial advisor, I’m legally obligated to put your best interests first. But it’s much more than a legal obligation. I’m dedicated to doing everything I can to help my clients reach their goals and live the retirement of their dreams.
THE FINANCIAL PLANNING CHECKLIST FOR AEROSPACE EMPLOYEES
Looking to get a headstart on planning for retirement? Our financial planning checklist for aerospace employees within 10 years of retirement helps you envision new horizons as you begin to consider the implications of life beyond work.
