How to Consider a Retirement Offer as an AT&T Employee
Financial Planning for AT&T Employees | March 15, 2023
Over the years AT&T has continued to make adjustments to their employee headcount. This has come in the form of retirement packages or even layoffs. The experience can be extremely stressful, but it's important to remember that it's not the end of the world. There are steps you can take to get back on your feet and find new employment or consider early retirement. Here are some of the most important steps to take after receiving your notice:
- Take care of your finances
- Understand your eligibility for benefits
- Consider your options on your 401k
- Consider your pension choices
- Be Proactive
Steps to Take After Receiving Retirement or Layoff Notice from AT&T
Take care of your finances
Although most people rely on the severance to meet these needs - make sure you have enough money to cover your immediate expenses, such as rent, food, and utilities. You may be eligible for additional state unemployment benefits, so be sure to apply as soon as possible.
Understand your eligibility for AT&T retirement benefits
If you have already satisfied Modified Rule of 75 (Mod75) these packages are the best way to start retirement. You’ll elect your pension payouts and enroll in the retiree medical coverage. If you’re short on your Mod75 you’ll need to seek another position within the company.Update your resume: Take some time to update your resume and highlight your skills and accomplishments.
Consider your options on your 401K:
If you have an outstanding loan you will need to continue to make payments, pay it all off or default on the loan. Each action has specific tax consequences and should be carefully considered. The best course of action is often dependant on your age and cash flow need. If you continue to make payments there are no penalties or taxes and you can keep your current payment schedule. This is not automatic and you must notify Fidelity. Defaulting on your loan does not hurt your credit score because the funds originally belong to you. It will trigger income taxes and additional penalties depending on your age.
Consider your pension choices
Each employee that has a vested pension plan will have several options even if they’re not eligible for retirement. Unlike a normal retirement you do not have the luxury of picking your last day on the books. This will force you to pick between leaving the pension at the company continuing to wait out age penalties or cashing out your funds. You will also need to choose between receiving your funds as a lump sum or paid out as an annuity. Each action has specific tax consequences and your personal situation will greatly influence which is best for you and your family.
Be proactive
Stay positive: Losing your job can be discouraging, but it's important to stay positive and motivated. Surround yourself with supportive friends and family and take care of your mental health. There is life after AT&T.
How We Can Help
The Focus Team at Farther specifically works with AT&T employees on these issues. A conversation with one of financial advisors can help you understand your next best move and how to make full use of your benefits. Discussions with our retirement planners should feel be a blend of talking with both HR and your personal financial advisor. The main difference is we directly serve our clients - the employee, not the company. There is no cost of obligation for an initial discussion on your plan.
The Focus Team is not endorsed, sponsored or affiliated with AT&T. We provide investment management, financial planning, tax planning and estate planning services to employees and retirees of AT&T. The firm is Registered Investment Advisor which custody assets at Fidelity and other custodians.
