Certified financial planner Wes Moss provides personal finance advice and accessible investment strategies. His guest post appears here Monday mornings.
Cisco Systems, which has a significant presence in Atlanta, used to be the most valuable corporation in the world. But in recent years the computer networking company has dropped to 29th on that list, with its workforce shrinking over that same period.
Last week Cisco announced it will lay off another 10,000 people — a whopping 14 percent of its employees.
What’s unsettling is that Cisco is still a very profitable company. Last year it had net income of $7.1 billion. But Cisco faces ever-increasing competition and must cut costs and boost efficiencies to meet Wall Street’s relentless demand for profit growth — not just profits.
The lesson: Even if you work for a company that is financial strong, you could be included the next round of “early retirement” offers.
It’s probably a good idea to be prepared to receive such a “package.” You’ll be ready to make a decision and move forward with your life if you’ve addressed the following issues:
Another job? — The first thing you need to consider is whether you’re really ready to retire. That decision might not be wholly financial. Some people just aren’t ready to stop working when the retirement bell rings. If you want to stay in the game, how quickly will you be able to find a new job? Would you stick to your current field, or pursue another interest? How much income do you want or need?
Social Security — How close are you to 62, the earliest Social Security retirement age? Remember, at 62 you won’t get your “full” Social Security benefits. Those start at 66 or 67, depending upon your current age.
Health care — How close are you to 65? That’s when you are eligible for government health care under Medicare. If you are still years away from that, how will you insure yourself and your family? Of course, all of this may change in the coming years as the new Obama health care laws start to kick in.
Retirement income planning — How does your “filling the gap analysis” look? If you don’t know how to use this simple retirement formula, click on the link for more info.
Financial organization — Do you know exactly how much you have saved and where to find it? Organize and/or consolidate all your retirement and investment accounts — your 401k, your wife’s 403b, both of your IRAs, both of your ROTH IRAs, and every single penny you have saved in CDs, money markets, mutual funds and brokerage accounts. Most retiree couples need no more than three accounts –- one joint account with a spouse, and an IRA for each spouse.
It’s never easy to be shown the door, but with some thought and planning you can be ready to turn an ending into a great new beginning.
– By Wes Moss, for Atlanta Bargain Hunter