By Ian Hoffman, CFP®
It can be challenging for professionals in the pharmaceutical industry to plan for their financial future. What happens if you’re suddenly laid off? There’s no way to completely take the sting out of a layoff, but our advisors have helped many in the pharma industry find hidden opportunities in what previously seemed like a wholly negative experience.
Each situation is different. However, these are some of the most common steps we’ve taken while helping clients regroup after an unexpected layoff.
Navigating Severance Packages
Severance packages are a key consideration. Your severance package may include one or more of the following:
- Salary continuation
- Lump-sum payout
- Bonus treatment
- Unused vacation or PTO
Financial planning for pharmaceutical industry professionals often includes running tax scenarios and taking steps to reduce tax liability. With a severance package, tax considerations can be especially important.
Our team can help you understand the tax implications of a severance and offer guidance on how much to set aside. If it looks like you’ll have an unusually high tax liability, we may see if the severance can be spread over multiple years.
During post-layoff financial planning, we’ll also look at your options for continuing healthcare coverage. You might be able to temporarily maintain your current health insurance through COBRA (Consolidated Omnibus Budget Reconciliation Act) coverage. You can compare the cost of COBRA coverage to the cost of purchasing marketplace coverage.
Understanding Retirement Plans and Pensions
Many people in the pharmaceutical industry have sizable retirement plans. Before determining how to handle your 401(k), we’ll verify a number of things, including whether it’s funded with pre- or post-tax dollars. We’ll also look at how much is fully vested.
When financial planning for after a layoff, it’s often advisable to roll your balance into an IRA or Roth IRA. If you have a pension, we can help you decide whether a monthly annuity or lump-sum payout is best suited for your situation.
Managing Long-Term Incentives and Benefits
Post-layoff financial planning for pharmaceutical industry professionals can be complex, especially when it comes to long-term benefits. Our team can assist with the following:
- Transferring vested restricted stock units (RSUs)
- Deciding whether to exercise stock options before they expire
- Evaluating non-qualified deferred compensation plans
We can help you decide how to handle these benefits and determine how they fit into your current financial plan.
Taking Advantage of Tax Planning Opportunities
If you receive severance pay or unemployment benefits, the timing may impact your tax bracket. We encounter this issue often when helping clients in the pharmaceutical industry, and certain strategies like Roth conversions and strategic charitable giving can mitigate tax ramifications.
Building a Long-Term Financial Plan
Financial planning for pharmaceutical industry professionals (or anyone) is an ongoing process. Once you’ve successfully navigated a layoff, you may need to revisit your retirement and savings goals, insurance needs, and other aspects of your financial plan.
Our team can assist with stress-testing your plan for various employment scenarios. This can give you an idea of potential weaknesses you may want to address.
Perhaps even more importantly, after a layoff, you need to decide where to go next. Do you want to jump back into a corporate career? Are you ready to start your own firm? Or are you contemplating retirement? The decision is yours, but our team is here to offer support and guidance along the way.
Looking for Quality Financial Planning for Pharmaceutical Industry Pros?
Thrive Wealth Management, LLC, was founded to offer real, personalized financial guidance for a fair fee. We have considerable experience in financial planning for pharmaceutical industry pros, and we can help you navigate your next chapter.
Ready to see what we can accomplish together? Contact us if you have questions. If you’re ready to schedule, call (215) 376-5530 or email ian@thrivewealth.com.
About Ian
Ian Hoffman, CFP®, is a Relationship Manager at Thrive Wealth Management, LLC, a boutique financial planning firm in Blue Bell, Pennsylvania, where he works closely with advisors to keep clients on track with their long-term financial goals. His goal is to relieve clients of financial worries so they can focus on what matters most to them.
Ian began his career in 2015 at The Vanguard Group, supporting both retail investors and nonprofit corporations. In his current role, he’s committed to helping clients feel confident and prepared, with a focus on maintaining trust and being thoroughly prepared for every meeting. Ian earned his Bachelor of Science in Psychology from the University of Pittsburgh and holds the CERTIFIED FINANCIAL PLANNER® designation. Outside of work, he enjoys cycling, trying new restaurants in Philadelphia, traveling the world, and spending time with his wife and their son, Luca. To learn more about Ian, connect with him on LinkedIn.
Disclosure:
The material set forth herein is provided for informational and educational purposes only. It should not be construed as tailored or individualized advice, and it is not a full analysis of the topics presented. Readers should discuss the topics addressed herein with the qualified professional(s) of the reader’s choosing.
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