6 Questions to ask your Employer about your Retirement

You may be thinking about retiring soon, but you are unsure where to start. Retirement can be confusing at times and will come with a range of questions, and the answers can vary depending on where you work. This is especially true in the oil, gas, and chemical industry, where energy giants such as BP and Chevron exist in the same sector as smaller independent drilling and mining operations. Because of this, getting information that is relevant to your retirement plan often demands you go directly to your employer. Asking the right questions, however, isn’t always easy. Sometimes, it’s tough to know where to even begin. Here are 6 questions to ask your employer to make sure you are well informed about your retirement.

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1. What is my official retirement date?

When you consider yourself retired may not be when your company?sees?you as retired. The day on which your company recognizes you as a retiree is called your official retirement date, and it’s important to know. This date can have a real impact in the time immediately following your retirement, particularly in regards to your group medical insurance benefits. As you arrange your Medicare and Medicaid?Supplement Plans, knowing this information can be invaluable. For example, let’s say a retiree has plans to retire at the end of 2023. However, their company’s books have your official retirement date listed as Jan. 3, 2024. Depending on the company’s benefits policy, this could mean medical benefits carry through to the end of January, rather than ending on the New Year. Knowing this helps you enroll in other plans when it is most relevant to you.

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2. Do I have a retirement agreement? What are its terms?

There is a good chance you don’t have a contract with your employer regarding your employment, but if you are unsure, you should talk to your HR team and find out. The terms detailed in these contracts – such as a non-compete clause – could be essential to you planning a smarter retirement. For retirees that do have a retirement agreement, it may not be a bad idea to go over it once more with an HR representative or your retirement advisor.

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3. What happens to my health benefits?

One of the most important things to understand as you approach retirement is how your health coverage will change. Coverage could cease once you’re retired, or (depending on the employer) could continue past your retirement date. To an extent, this will depend on your employer’s policies. First things first, find out whether your company provides group health insurance benefits after retirement. If they do, then you may be able to enjoy similar dental, optical and medical benefits as you had while employed. If they don’t, we’ve discussed?alternative healthcare options for retirees, including programs like COBRA, Medicare, and the ACA.

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4. What happens to my employee stock options?

If you own employee stock options from your company, it’s important that you find out how those will be treated once you retire, notably whether vesting will?continue after retirement, or cease upon your resignation date. Similarly, find out what will happen to any unvested shares upon your exit. Will that value be forfeit? In some cases, unvested shares may be paid out in cash to the employee at a later date – does this apply to your situation??Lastly, if your company will buy back those shares, pin down when you can expect that to happen. Stock options can be a particularly complex thing to manage when approaching retirement, especially when we start taking into account the many moods of the market. It may be worth talking to your financial or retirement advisor to make better sense of things.

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5. When and how will deferred compensation be paid to me?

Employees with?deferred compensation or excess benefit plans? will want a few important pieces of information, mainly when those funds will be delivered to them and how they will be delivered. Commonly, this compensation is paid as a lump sum 60 to 90 days after termination, but it could vary depending on the company. For instance, these funds could be paid over a long period of time in smaller installments. If this were the case, you’d want to plan with that in mind.

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6. Do I have to cash out my 401k?

Many oil, gas and chemical employees have saved money with a 401(k) plan. If the funds within that account are greater than $5000 when you retire, your company will be required to continue maintaining those funds. You won’t have to withdraw anything until you’re 73 — the age at which you’re required to take minimum distributions. The only instance where you would be forced to cash out your 401(k) is if the account has less than $5000 invested. This will trigger an automatic lump-sum distribution, and those funds will be deposited to you.

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