How to Retire from Intel – a Financial Guide to the First 60 Days

Intel is the home to many loyal employees, which is no surprise given the great benefits package it offers. When it’s time to retire, for many it is the first time you’ll have to make financial decisions outside of your Intel benefits. Here are the most common questions we get about how to retire from Intel and some thoughts about what you should be doing in the first 60 days.

401k Rollover

We’ve written about the great benefit options available to you through the Intel 401k. Did you catch our blog? If not go ahead and have a read here.

Embarking upon retirement is a great opportunity to dust the cobwebs off any 401k plans of the past. This could mean your Intel 401k as well as any 401k from any past employer.  The time is now; you want to get your financial house in order and consolidate all those resources in one place.

What’s the danger in leaving an old 401k with a past employer, you ask?  There are a few disadvantages. One, you may be getting charged administrative fees from having your assets in the plan. Secondly, without a comprehensive view of all your money, you may be incorrectly evaluating how much risk your portfolio as a whole is exposed to. This is a formula for disaster if the market dips and your portfolio drops.

What you should do within the first 60 days:

  • Get a copy of your Summary Plan Description, or SPD, and read the language regarding how rollovers from the plan are processed
  • Understand how much of the 401k match you received is vested. This will give you a sense of what the true value of your assets really is.
  • Contact a financial advisor if you are unsure about the tax treatment of any of these 401k assets. Typically you would roll a 401k over into a Traditional IRA, as both handle pre-tax money. However with some plans you do have a Roth 401k option which would mean the money is saved on an after tax basis. This is not something you want to handle incorrectly.

Create a Social Security Strategy

We’ve commonly seen people retire from Intel and then turn around and perform part time work as a consultant to the company. This is a great option if you are looking to delay taking social security. Read our blog I’m 62 with $1 Million Saved. Should I Take Social Security? for creative ways to earn extra income if you decide to delay taking social security.

The decision about what age makes the most sense for you to start taking social security can be very confusing. Don’t wait until retirement is in full swing to figure your social security strategy out.

What you should do within the first 60 days:

  • Know the numbers. This means not only your monthly expenses but also what the different social security options mean for you in terms of income.
  • Map out your social security scenarios. Write them down and evaluate the merits of each.
  • Consider alternative scenarios. As mentioned, in the modern day “gig” economy there is no shortage of ways to generate income from your skills and experience on a part time or consulting basis.

Draft a Financial Plan

It can be shocking to go from a world in which your income and expenses are relatively stable to one where your days are full of new people, new experiences (travel, maybe?) and of course there’s always the grandchildren. Sit down and figure out what this is going to look like in terms of cash flow required before you give away too much without knowing the facts. Without a plan and some guidelines for spending you may find yourself facing a rude awakening.

What you should do within the first 60 days:

  • Put some numbers to your monthly recurring expenses as well as those one timers that you envision coming into play over the next few years
  • Determine the source of cash flow to meet these needs
  • Meet with a tax expert to make sure that you’ve properly accounted for the tax implications of any decisions you anticipate making as well as your ongoing income and investment windfalls
  • If needed discuss your financial plan with a qualified financial advisor

Evaluate your Asset Allocation

Now that your income has changed, it may be time to reevaluate your overall investment portfolio. Is your risk tolerance still what it was before? Or with less flexibility in terms of cash flow is it better to sacrifice return for lower risk? Perhaps the opposite is true; risk tolerance varies from person to person so there is no way to make a general rule about what it would be for any one person after retiring from Intel.

What you should do within the first 60 days:

  • Gather information about all assets held across all accounts
  • Evaluate your risk tolerance using a risk tolerance questionnaire and other assessment tools
  • Make any needed adjustments

Don’t Neglect Your Emotional Health

Before we sum it up on what to do when retiring from Intel, we wanted to mention that finances are only part of the equation. Retirement is your time. Explore new opportunities whether they be spending time with family, pursuing a new hobby, or just doing the things you’ve never had time to do in the past.

Pay attention to the emotional aspects of retiring from Intel. You’ve been working hard for years at a steady job and now all of a sudden your days will be filled with free time. This can be a hard adjustment emotionally. You don’t have to sever all ties with Intel at once. There are great alumni groups that you can be a part of either online or in person. This may help you stay in the network and culture that perhaps you have become accustomed to.

Summary on what to do when retiring from Intel

Retiring from Intel has many implications from the financial all the way to the emotional. If you have any questions about what to do when retiring from Intel and especially the strategy to following during the first sixty days, please contact us.

About James Dwyer, CFP®, AIF®

James Dwyer has worked in the financial services industry for over 15 years. He is currently a partner at Providus Advisors, an investment advisory firm located in Chandler, AZ.

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