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Retirement Shock: Need to Find a Job After 40 Years at General Electric

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Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#31

Post by madengr »

froindt wrote: post #12
madengr wrote: post #4

Earlier quoted context omitted.

It took a lawsuit for my employer (Honeywell) to allow moving (out of Honeywell stock) of matched contributions. I still keep about 20% in company stock. It has done very well and pays a good dividend. To think that we were almost bought by GE years ago.

>I still keep about 20% in company stock. It has done very well and pays a good dividend. To think that we were almost bought by GE years ago. I'm curious why you keep so much in Honeywell stock? For a very long time GE was a great company to have that would routinely give nice returns and dividends, and then things went downhill. Layoffs happened, and those people were faced with much lower portfolio valuations if t…

$2.3k/year in reinvested dividends.

$18.5k contribution + $10.5k employee match + $2.3k dividends. The dividends are like an additional 7% bump in contribution.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#32

Post by pmiller2 »

pg_bot wrote: post #20
madengr wrote: post #4

Earlier quoted context omitted.

It took a lawsuit for my employer (Honeywell) to allow moving (out of Honeywell stock) of matched contributions. I still keep about 20% in company stock. It has done very well and pays a good dividend. To think that we were almost bought by GE years ago.

If you are a rank and file employee, I would suggest divesting entirely from your company's stock. From a risk perspective it's extremely dangerous as you are already dependent on your employer for your source of income. In the case that they do poorly you have the potential to lose both your income and your savings. Unless you have the ability to seriously affect the stock price, you are putting too many eggs into a…

There's no need to divest entirely, assuming a reasonable portion (say, no more than 3-5%) of total holdings is in company stock. That said, I have heard someone in my company say they refuse to invest in tech stocks at all, because they're concerned about a sector-wide downturn taking out both their job and their investment gains. I think that's a bit of an extreme position, but I understand where it's coming from.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#33

Post by madengr »

pg_bot wrote: post #20
madengr wrote: post #4

Earlier quoted context omitted.

It took a lawsuit for my employer (Honeywell) to allow moving (out of Honeywell stock) of matched contributions. I still keep about 20% in company stock. It has done very well and pays a good dividend. To think that we were almost bought by GE years ago.

If you are a rank and file employee, I would suggest divesting entirely from your company's stock. From a risk perspective it's extremely dangerous as you are already dependent on your employer for your source of income. In the case that they do poorly you have the potential to lose both your income and your savings. Unless you have the ability to seriously affect the stock price, you are putting too many eggs into a…

I don't consider 20% as having all the eggs in one basket. I sold it all at $80 years ago, thinking it was too high (it was at $20 when I started in mid 90's). I'd be up several $100k if I had not sold it.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#34

Post by singhrk »

ISL wrote: post #30
herodotus wrote: post #26

Earlier quoted context omitted.

I have to agree with you. I always took a very conservative approach and divested my company shares in order to diversify, even before I retired. In my case, the pain came not from stock losses, but from their gains. I "lost" so much by selling shares too soon. But now I am diversified and can survive a loss of my holding in my (former) companies shares (I still own some).

Decisions can only be judged in the context within which they were made. Diversifying is a wise move for strongly mitigating downside risk. One of the wisest and thoughtful people I know was a long-time and early employee at a major tech company. That friend did exactly the same thing, diversifying early. It is difficult to overstate how successful he has become in life; success need not be measured in dollars.

I feel like framing your first sentence and put it a place where I can see/show it everyday !

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#35

Post by pm90 »

Quote from the article:

> “Employees need to think very carefully about investing their own money beyond 10% in company stock,” said Corey Rosen, founder of the National Center for Employee Ownership, a nonprofit that works with companies. “If you are looking at retirement, then diversification is a good thing.”

The whole article seems to be "People trusted GE stock way too much; it went down and they lost massively". This is another reason to be informed and proactive about the basics of finances and where your money really is. Perhaps I sound too harsh, but I simply fail to understand how all these people thought that holding 6 figure amounts in a single stock was a good idea? I just do not get it... wouldn't any financial planner have recommended diversification?

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#36

Post by z3t4 »

this_user wrote: post #22

This looks like a failure with portfolio construction to me. Keeping a lot of your net worth in the stock of one company is not a very good strategy for diversification. This is especially true when it is the stock of the company that you are working for, because if the company gets into trouble, you might not just lose your job, but also your savings. One easy improvement your this particular case would have been to…

The whole reason stocks where invented was so that you could spread the risk. Instead of owning 100% in one ship, you owned stock in many ships, so if one ship sank you didn't loose it all.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#37

Post by mirceal »

overcast wrote: post #29

I've always sold my company stocks soon as they were received. Then reinvested those funds in in either Vanguard index funds, or paying off school loans. Makes zero sense to tie up your entire income to one company. Your weekly paycheck, AND stocks are totally reliant on the same company performance.

this may be an unpopular opinion (especially if the stock is doing well) but I've also done the exact same thing (sell on vest + diversify).

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#38

Post by xiphias »

acjohnson55 wrote: post #28
pg_bot wrote: post #20

Earlier quoted context omitted.

If you are a rank and file employee, I would suggest divesting entirely from your company's stock. From a risk perspective it's extremely dangerous as you are already dependent on your employer for your source of income. In the case that they do poorly you have the potential to lose both your income and your savings. Unless you have the ability to seriously affect the stock price, you are putting too many eggs into a…

Not sure that's universally a good idea. Rank-and-file may still have inside information that makes holding stock advantageous (obviously adhering to any applicable insider trading rules). If your skillset is highly portable, you can probably consider your income decoupled from your employer. Your equity with your employer could then be considered high-risk moonshot investment. But I certainly agree that your core ne…

Every employee has insider information. For me at Google the biggest change was from Eric Schmidt answering directly to questions at TGIF and looking at easy to fix things when he could and looking for great growth possibilities to Larry Page talking about working hard for the sake of working hard to finally Sundar who's looking at Larry for every question and make sure to answer as politically as he can and not upset Larry. Also even project level big meetings took more than 50% of the time to speak about respecting women. I respect women, but when the focus on them is bigger than the focus on users/customers, I know it can't be the growth company that it was before.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#39

Post by virtuexru »

> He left GE with an annual pension of $85,000 and company stock valued at more than $280,000.

> Retirement looked pretty good until GE shares collapsed. His shares are now worth about $110,000, prompting a late-life job hunt.

I don't understand; it says he has an $85,000 pension. Isn't that more than enough to retire on? His stocks collapsed to about half their worth (roughly $110,000). This isn't exactly a crazy one off scenario; if you are invested in a single company and do not diversify, it's hard to place the blame on "others" and "complain" about having to find another job after keeping an almost six figure pension at the same time.

Is there a chance that GE could forfeit on their pension payout requirements if they lose more capital? Not sure how that works so forgive my ignorance.

Re: Retirement Shock: Need to Find a Job After 40 Years at General Electric

#40

Post by solotronics »

mirceal wrote: post #37
overcast wrote: post #29

I've always sold my company stocks soon as they were received. Then reinvested those funds in in either Vanguard index funds, or paying off school loans. Makes zero sense to tie up your entire income to one company. Your weekly paycheck, AND stocks are totally reliant on the same company performance.

this may be an unpopular opinion (especially if the stock is doing well) but I've also done the exact same thing (sell on vest + diversify).

if you think your company will outperform in the short term you could set up a stop loss limit to allow only a certain percentage of loss in your company stock that way you are only exposed to upside
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