Find Financial Advisors for Con Edison Employees & Executives: Q&A Insights from the Experts

Build Your Con Edison Pension Estimate into a Broader Financial Plan

Pension benefits play an important role for Con Edison employees, and the advisor below uses an estimate of each client’s pension to build out the rest of the plan. A common challenge is the lack of a combined plan for the pension, the 401(k), and other investments.

The 401(k) May Be Con Edison Employees’ Most Underused Benefit

Many employees either aren’t taking full advantage of the 401(k) or need help deciding how to use it now and over the long run. Highly compensated employees should also make use of every tax-advantaged strategy the company offers.

Health Savings Accounts Give Con Edison Employees a Triple Tax Advantage

HSA contributions are tax deductible, the money can grow tax deferred, and qualified withdrawals are tax free. Before leaving the company, decide what to do with both the 401(k) and the HSA.

We sit down with Con Ed employees, review all their benefits, explore what benefits are not currently utilized and discuss the pros and cons of any non-utilized benefits. The pension benefits can play an important role in our work with Con Ed employees. We often use an estimate of their pension plan to help build out their broader financial plan.

When we first meet with an employee at Con Ed, we want to learn everything we can about them. We discuss their family, current role at Con Ed, how they spend their time, and what their long-term goals are. After learning everything we can about them, we take a deep dive into their finances, specifically asking questions such as what their money means to them and about each of their financial goals.

In my opinion, the 401(k) may not be utilized enough at Con Ed. However, that also applies to many other employees at different companies. Many employees are either not taking full advantage of their 401(k) or need help exploring how it should best be used now and in the long run.

The health savings account. A health savings account can be very valuable as it provides triple tax benefit opportunities – contributions are tax deductible; the money can grow tax deferred and qualified withdrawals are tax free.

We recommend employees who are planning to resign to get their house in order. They should consider both the “soft” part of their resignation, such as the extra demand on their time from the transition, the emotional part of their transition and the “hard” part of the transition, specifically regarding their investment and retirement accounts. They should decide what to do with their 401(k) plan, consider their current HSA plan, and make sure to keep a copy of all relevant documents. We recommend employees develop a checklist, and work on each of these items in an expedited manner. If they can take a weekend to develop and execute on these items, they will have an opportunity to hit the ground running in their new role.

As Con Edison employees transition to retirement, they may want to consider developing a solid budget, balance sheet and cash flow statement. For our clients, we use financial planning software to capture all their sources of income and expenses and account for future inflation to help them determine the probability of meeting their goals. Nothing is perfect and as a result, their financial plan must be updated annually. The most important thing for Con Ed employees to do as they transition to retirement is to be aware of their spending needs, live within those means and have a suitable portfolio for them. I wrote an e-book titled, 5 Steps To Retirement Planning, which can be accessed here. That book has a few checklists they can use as they transition to retirement.

Con Ed employees should start by considering if they need an advisor. Do they have complex investments? Are their finances complex? How much time do they want to allocate to their investments and finances? Might working with an advisor free up their time and allow them to spend more time on what they value most such as family or travel? Are they comfortable giving up control of their investments? They can even interview a few advisors before deciding. As an advisor, we ask that they be upfront with us before setting a meeting and keep us updated along the way. If they decide not to use us or decide to work with another advisor a friendly email or phone call is always appreciated.

A unique challenge we see with Con Ed employees is the lack of a combined plan regarding their pension benefits, 401(k) plan and other investments. We help them overcome these obstacles with a broad financial plan – updated annually that is tailored to their goals.

We recommend Con Ed employees start by asking a financial advisor if they are a fiduciary. Will they always hold their clients’ interests above their own in any situation? What services do they provide? What are their combined fees including investment fees? Can the financial advisor provide a broad-based financial plan? Is there an extra fee for that plan? How often will they communicate with the client? How is the portfolio transition handled?

Con Ed employees are hardworking and very intelligent. As with all employees, I often find that they need help with comprehensive planning.

Highly compensated employees should take advantage of all the tax advantaged strategies that Con Ed offers.