Retirement Planning for Employees of WE Energies / WEC Energy Group
When you are getting ready to retire from WE Energies / WEC Energy Group it’s important to find a good financial advisor, avoid some potential pitfalls and make use of some little known rules that can make your retirement a success.
You’ve probably worked at WE Energies for 20, 30, or even 40 years! Whether you’re a lineman or an executive, work at corporate downtown, or belong to a local union it’s vital that you make the best choices for you and your family as you transition to retirement.
What You Will Need To Decide
You’ll need to make decisions on your:
- Pension – Monthly or lump sum, when to start it?
- Health insurance – Standard or Plus, or something else?
- Life insurance – Do I convert, or get my own?
- 401(k) – Keep or rollover, what about WEC stock?
- Unused sick leave and vacation – How do I get paid for it?
- Social Security – When to start, based on an overall plan?
It’s amazing how many questions you’ll need to answer in such a short time frame. Download our WE Energies retirement checklist so you don’t miss any steps!
5 Potential Pitfalls:
Retirement can be exciting and overwhelming at times. Please watch out for these areas and make sure you don’t miss out on any opportunities.
1. There are many different ways your pension could be calculated and paid out. Run many scenarios, based on retirement date and age to determine when your pension ‘maxes’ out, how much your monthly amount and lump sum option grows by waiting, or drops by taking early.
2. Remember to complete your pension start forms, before you want the pension to start, with Fidelity through NetBenefits.
3. Find out if you can move your sick leave and vacation benefits to a premium medical account.
- You may want to decide whether you save up benefits to go into the account, or use up benefits before your official retirement date.
4. You must pay for your health insurance benefits. They are not deducted from your pension. Contact Benefits Express to set this up.
5. If you have WEC stock inside your 401(k) there is a little know tax rule that could create a huge tax benefit for you. If your advisor isn’t talking to you about “Net Unrealized Appreciation” on this WEC stock then you may have the wrong advisor!
7 Successful Secrets of a WE Energies Retirement
We’ve helped many WE Energies employees retire over the years (in fact WE Energies is our #1 company for our clients to have retired from). Here are some tips we can share after watching so many successful WE Energies retirements.
1. If you have WEC Energy Group stock inside your 401(k) you can use a little-known tax rule called Net Unrealized Appreciation NUA) to convert some of your taxes on your 401(k) from Traditional income taxable at 2020 rates of 10-37% to capital gains tax rates of 0-20%.
- This can be a huge benefit to you and your heirs. Work with an accomplished tax planner who has dealt with NUA before.
2. If you have stock options you can work with your advisor to get dividends from the stock and/or move future stock growth from income taxable at 10-37% to capital gains tax rates of 0-20%.
- This can be a huge benefit to you and your heirs. Work with an accomplished tax planner who has dealt with stock options before.
3. Before you retire, run pension scenarios based on different ages. You’ll be able to see when your monthly pension maxes out, how much it grows (if at all) over time, and how much your lump sum option grows by waiting. This doesn’t take much time and will give you incredible insight on how to maximize your WE Energies pension.
4. If you are eligible for the Premium Medical Account you can move unused sick leave and vacation benefits tax-free into the account, then reimburse yourself, tax-free for insurance premium payments.
5. You have one year from your retirement date to make use, one last time, of the WE Energies Foundations Matching Gifts Program. If you ever were to make large gifts to charities now is the time! The maximum amount to give is $20,000.
6. The BRIF (Blended Rate Income Fund) option within your 401(k) is a ‘stable value fund’ which are not able to be found outside of 401(k)’s. It probably offers better interest than you can find in short-term bank accounts, and doesn’t carry the fees or commissions a financial advisor would charge.
7. If you are part of the WEC Energy Group Executive Deferred Compensation plan look into the WEC Energy Group, Inc. Prime Rate Fund.
- This is probably paying a higher rate than even the BRIF fund! It could easily be the best interest rate you can find to save into!
- If you are retiring soon, and especially if you are signed up for the 5 year payout option, you may want to take the market ups and downs out of your payout by making use of the Prime Rate Fund.
As you can see creating a successful retirement from WE Energies / WEC Energy Group takes a lot more than filling out one form and telling your boss when you want to retire!
You get one shot at retirement and there’s no room for mistakes so please find a financial planner who focuses on retirement and has successfully helped many WE Energies employees retire.
2 Quick Ways To Tell If You Found The Right Financial Advisor For Your WE Energies Retirement
A good financial advisor has worked with WE Energies employees before, focuses on retirement planning and knows how look into the options available to you.
But how can you tell if you’ve found the right advisor?
Chances are your pension and benefits might look different depending on which union you belong to, whether you work in corporate, when you started working at WE Energies and how old you are when you retire.
A good financial advisor is curious, and wants to get all the facts. They should be asking questions, and gathering information specific to your unique situation, specifically your WE Energies Retired Employees Resource packet, and any other info HR gives you. A curious advisor is a good sign.
But here are the 2 key things this advisor should be doing:
When you work with a financial advisor to decide all your WE Energies retirement benefits they should:
1. Help you get projections on all of your available pension options.
- You would be amazed at how your pension numbers could change based on the month you retire, the month you take it, whether you take a lump sum, or monthly pension.
- You should be able to run projections based on different retirement dates, different ages you take your pension, and different payout options.
- This is a huge decision that could make or lose you $100k+ over your lifetime all because of when you signed a form and what boxes you checked.
- Your advisor should help you get this info and make a reasonable comparison between monthly and lump sum, and show you how taking your pension earlier or later could change your retirement.
2. Find out the ‘cost basis’ (fancy word for principal) of the WEC Energy group stock inside your 401(k)
- There’s a little-known tax benefit that applies to employer stock inside your 401(k), it can drastically change your retirement tax situation if you know how to make use of it.
- If they aren’t asking you whether you own WEC stock, and aren’t finding out the ‘cost basis’ before they make a recommendation then we believe they aren’t doing their job.
Congrats on your upcoming WE Energies retirement! You’ve worked hard for 20, 30, 40+ years helping us keep the lights on and we appreciate it. We’ve enjoyed working with all our WE Energies clients and love helping them make sure their retirement is successful.
To speak with a retirement planning specialist about planning for your WEC Energy Group retirement please call us at 414-250-8875 or send us a quick note.
About Keil Financial Partners
Keil Financial Partners believes retirement should create enjoyment, not anxiety. We know that figuring out retirement can leave you anxious and finding the right retirement planner can be hard.
That’s why we created a 5-step retirement income plan to help you make the best choices with your money. And why we focus so much on financial education through our blog, guidebooks and Retirement Revealed podcast.
Keil Financial Partners does not provide legal, accounting, or tax advice. Consult your attorney or tax professional. Representatives have general knowledge of the Social Security tenets. For complete details on your situation, contact the Social Security Administration.
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