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

For Walmart employees, understanding how their retirement benefits are taxed is massively important. Many employees who have been with the company a number of years have primarily saved in the Walmart 401K. This causes distributions to be taxed at ordinary income in retirement, potentially causing taxes on social security benefits and increased medicare surcharges. A strategy we consider is contributing to the Roth 401K and/or using Restricted Stock Units (RSUs), once vested, to pay the tax on conversions to Roth so employees can enjoy tax free growth.

For those who benefit from the Walmart DCMP program, we help to determine the right amount to allocate, and how to use that as a conservative anchor in their portfolio to take risk elsewhere. We also like to create flexibility with money in the DCMP to allow for early retirement or other goals.

We think financial planning is about helping to identify the overlap between assets and purpose – what do you want to spend your time, money, energy, and attention on (these are your assets)? What’s important about that?

Financial planning is both art and science. The information we can gather about who you are, and who you want to be, is just as important as the “numbers” – especially when making recommendations.

We spend time getting to know you, BEFORE we give advice.

It may sound like an odd place to start, when most advisors want to talk about returns and investments (they don’t usually want to talk about taxes). Those things are important, yet without understanding the meaning behind the goals and objectives, we don’t believe we can give good advice.

Imagine you went to see a Physician about a certain issue, and before they got to know your experience and history, they started prescribing medications. We find too often that’s the experience our clients have had with other advisors.

Among Walmart employees, similar to many other firms, Health Savings Accounts (HSAs) are rarely used thoughtfully. They can be an incredible planning tool, and are often overlooked.

We also see that using RSU’s to create flexibility is a big missed opportunity.

We always advise folks to do their best not to burn any bridges. The world is small enough and even smaller in Bentonville, where the vendor population is very tight-knit.

We recommend having a resume updated if you haven’t accepted a new role.

Understanding how your health insurance will transition is an important consideration many folks forget. While it varies depending on the next step, it’s important to not overlook it.

We recommend everyone do a financial inventory and get organized when in a time of transition. It’s not always “fun”, yet making sure you’re not leaving any money on the table is important.

This is the time to review beneficiary designations on old accounts, consider rolling the old 401K to the new plan, or to an Individual Retirement Account (IRA) if appropriate.

The transition to retirement or ‘work optional’ is challenging for many highly motivated people. We recommend planning appropriate vacations and meaningful work such as volunteering/ hobbies before retiring – this seems to soften the transition and make entering retirement much more enjoyable. Determining how you’ll allocate your time is arguably as important, if not more important, than allocating your investments.

We recommend that our clients create an income plan BEFORE retiring. There can be significant tax ramifications of “figuring it out when you get there”. The biggest mistake we see folks make is not understanding how their Social Security is taxed. This can cost hundreds of thousands of dollars of unnecessary tax over their lifetime – and yet, most advisors don’t know how it works!

We encourage DIY investors to consider the cost of NOT getting a second opinion. Investment management is one thing, but retirement planning has incredible nuance to it that many people overlook.

How will my investments be taxed? Can I minimize my lifetime taxation? Am I taking too much (or not enough) risk in the markets?

What is my plan to turn my assets into income? What are the tax implications of doing that?

Am I going to run out of money? How should I deal with Inflation?

What about long-term care?

Are my beneficiary designations up to date? Do I understand what’s going to happen to my assets when I pass?

Do I need life insurance? Do I have enough or too much? Should I keep these old policies?

There are a number of different areas that a Certified Financial Planner (CFP) can provide incredible value to a recent retiree, even if they choose to continue to manage their own investments.

Without a doubt, the biggest risk that we see folks taking is having too much of their overall net worth in their employer’s stock. This can be great if things continue to go well. No one assumes that Walmart will go bankrupt, obviously. Underperformance v.s. the broad market is a huge issue that can have a significant opportunity cost.

There are a few ways that we can manage or trim a significant single stock position, depending on what type of account they are held in. Many times folks have had their stock for years, even decades, and therefore have significant embedded capital gains.

We can use charitable planning to control taxes while diversifying holdings.

A strategy that a lot of folks don’t know about is what’s called a Separately Managed Account or SMA. We can do very complex tax harvesting and specific investment management for much less than the average Mutual Fund costs. It’s a strategy that was typically reserved for the Ultra High Net Worth, we offer these services starting at 500K / account.

Are you a fiduciary? Do you have to act in my best interest or provide “good enough” recommendations?

Will you be providing comprehensive financial planning or just investment management?

What will I pay in fees? Are there any hidden fees in the products you’re recommending?