Q: As a financial advisor with experience helping Lockheed Martin employees save for their retirement, what challenges do you find they often face when building their financial plans?

Blaine: I generally find that Lockheed Martin employees plan too optimistically on one hand (future stock market returns, the reliability of their jobs, lack of bad things happening in the future) and too pessimistically on the other (tax rates going up). 

Most Lockheed Martin employees I’ve worked with lack sufficient life insurance, have no estate plan (e.g., a last will and testament, trust, etc.), don’t know how they should prioritize saving for their future, don’t have a scientific process for managing their money, lack any process for managing their budget, and typically assume that their job will be around forever. These are all major assumptions that could be completely inaccurate. 

What’s worse is, if Lockheed Martin announces a major layoff due to a decrease in government military spending, you’d expect most jobs in aerospace engineering to have major cuts simultaneously, and as a result, finding a job would be incredibly hard for many of their employees. 

The point is, if Lockheed Martin employees plan too optimistically, it could result in their plans falling short and their futures being worse than expected.

Q: What risks are prevalent in the financial lives of Lockheed Martin employees that aren’t significant risks to many other people? 

Blaine: The most important risk faced by Lockheed Martin employees is the fact that few recognize the real risk that future administrations could advocate for a sharp cut in Department of Defense (DOD) spending. Many don’t save enough because they assume things will always be good for Lockheed employees. In preparation for that, it’s important to be conservative with your saving and plans.

Many Lockheed employees don’t necessarily know how to use their equity compensation or deferred compensation packages, which can be substantial. If you’re a Lockheed employee who lacks a scientific approach to using these benefits appropriately, you could be wasting literally tens (if not hundreds of thousands) of dollars in taxes in retirement or taking way too much risk. There are things you should do yourself and others you shouldn’t (this is one you shouldn’t).

Tax planning is another major area that many Lockheed employees typically overlook. Most employees of Lockheed are paid well, and rarely do they need their whole salary, so saving is very affordable. It’s not uncommon for Lockheed employees to have rental properties, significant balances in their bank accounts, large uninvested dollar amounts in HSAs, or poorly constructed saving strategies because there’s so much room for error when you earn much more than you need. This leads to thousands of dollars in wasted taxes for no good reason.

Another unfortunate risk affecting many Lockheed employees is the heightened likelihood of divorce. It’s a well-known fact that people who work 60 hours a week or more are significantly more likely to get a divorce. Without proper planning for a divorce, not only can it make life harder to afford today, but it can make your future more difficult as well. 

Q: What are the most valuable and rarely used employee benefits for Lockheed Martin employees?

Blaine: If you’re a Lockheed employee, your employer-sponsored legal services through Hyatt Legal can be incredibly valuable. The cost of an attorney preparing estate documents, reviewing your divorce plan, reviewing trusts, representing you in the event of a DUI, or a slew of other things is incredibly valuable.

Another valuable opportunity involves using a mega backdoor Roth conversion for your Lockheed Martin 401(k) to get additional funds into your Roth 401(k). This is a fantastic way to save potentially as much as $64,500 a year into your Roth 401(k) plan.

And finally, employees should consider taking advantage of the life and disability insurance benefits offered by Lockheed Martin. Insurance policies are expensive, but getting life and disability insurance through your employer-sponsored plan can make it more affordable. Ensuring you don’t just make the right choice on how much of each you should get, but also what kind, is incredibly important to your risk management strategy.

Q: What experience should employees of Lockheed Martin expect from a financial advisor who specializes in working with company employees? 

Blaine: Because many Lockheed Martin employees have long work weeks, I understand they may not want to spend a lot of time chatting or tied up in meetings. If any meeting can be replaced with a text message, an email, or a task listed on their planning dashboard, that’s a better experience I strive to deliver and encourage Lockheed employees to look for in any advisor they’re thinking about hiring.

I also believe in being direct, so ensuring the meeting is simple, straightforward, and easy to follow is vital. I follow every meeting by sending an email summarizing the points that I’ve reviewed with them. And by sharing the document I’m taking notes on, my clients can ensure I’m understanding what they’re telling me throughout our conversation. 

If you’re a Lockheed employee interviewing financial advisors and any of them say they’re opposed to anything digital, it means more conversations, time, and energy are required of you unnecessarily. That’s not good enough. If your current or prospective financial advisor is incapable of giving you all the information you’re looking for when you ask them “why”, it means they’re likely parroting something their company told them and don’t really understand it and whether it makes the most sense for you at that moment in time.