By Clay Elliott, CFP®, AAMS®, CRPC®

As a plant worker for companies like Exxon, Entergy, Dow, and Shintech, you play a pivotal role in driving our country’s growth and progress. When you’re focused on making the best career decisions and caring for your family, it’s easy to overlook a critical aspect of your financial life: legacy planning. Laying out a plan to pass down your wealth and safeguard your assets is essential to building a brighter future for you and your loved ones. 

Risk Management

Anything in life involves facing a certain level of risk. As financial advisors, it’s part of our job to assess the potential threats to your financial stability and the legacy you plan to leave. Then we help you mitigate the risks associated with your finances by assessing your risk tolerance and adjusting your investments to fit your goals, time horizon, and comfortability. 

When helping you manage retirement savings options such as your 401(k), this could look like diversifying your investment portfolio to include options beyond your company stock. We may also rebalance your portfolio to safeguard against market fluctuations. (1)

There are also risks associated with your line of work. If your job is inherently risky, there could be potential for workplace accidents, injuries, or occupational health issues. Your stable income is how you provide for your family, and it’s one of the biggest factors in growing your wealth. If an injury or incident impacts your ability to earn income, it could delay your financial goals or disrupt your lifestyle. That’s why it’s important to consider having your own disability, life, and long-term care insurance to help curb the risk associated with a loss of income. We’ll help you determine the right level of coverage for your situation. 

Choosing the Right Pension Option

Employers rarely offer a pension as part of their benefits packages these days, so when you have the opportunity to participate, it’s often a good idea to do so. Under these types of retirement plans, your employer is required to make regular contributions and may accept additional contributions from you. There are two types of pensions you should know about, the defined-benefit plan and the defined-contribution plan. 

Defined-Benefit Plans: This type of pension is funded by your employer and they guarantee to make specified monthly payments to you from retirement until death. The amount your employer contributes and the pension payment are determined by internal calculations based on your earnings and time with the company. This could look like 1% of your average salary. Your company is liable for the monthly payments even if the value of the pension doesn’t cover the full benefit. 

Defined-Contribution Plans: You won’t get a stated benefit at retirement under a defined-contribution plan. Your employer could permit you to contribute to the pension alongside their contributions. Typically, you’d choose how the money within the plan is invested and how much you want to set aside from each paycheck. 

In some cases, your employer may choose to match up to a certain percentage of what you add. Rather than having a predetermined payment amount guaranteed by your employer, the retirement benefit is based on how well your investments performed and how much you and your employer added to the account. So your employer isn’t liable for payments after the money runs out. 

If you’re choosing between these two options, consider whether or not you want the option to contribute to your pension plan in addition to your other retirement accounts. The defined benefit plans could allow you to see just how much you’ll receive each month in retirement. However, it might not allow you to make tax-advantaged contributions like a defined-contribution plan would. 

Estate Planning

When you’ve established a clear plan for how you want your wealth distributed upon your passing, it alleviates an extra burden from your family. Determine your beneficiaries and detail how you want your wishes carried out with comprehensive estate planning. Typically this process covers aspects including:

• Will
• Trusts
• Tax efficiency
• Updates

Without a will in place to specify the division of your assets, your loved ones may have to contend with state law and lengthy probate proceedings. When you want to transfer significant wealth to your heirs, a trust could help facilitate a seamless asset transfer and mitigate estate taxes in the process. 

When transferring your wealth to your loved ones and the charitable organizations you care about, estate taxes could diminish your gifts to them. With the help of a trusted financial advisor, you can develop a tax-efficient strategy to transfer your wealth. 

Estate planning doesn’t end with a one-time plan. You’ll also need to review your plan regularly and make any necessary updates as your financial situation evolves. Reviewing and updating your will, trusts, and beneficiary designations helps you pursue alignment with your legacy goals. 

Work With a Financial Advisor

Safeguarding your assets through comprehensive legacy planning is essential to transferring your wealth strategically. Without a well-executed plan centered on risk management, pension options, and estate planning, you could be putting yourself and your family at a disadvantage. 

At Oak Capital Financial Advisors, your priorities are our only priority. And we’re skilled at helping plant workers like you navigate the complexities of legacy planning and financial planning. Create a brighter future for your family by implementing a comprehensive legacy plan. To get started, call 225-416-7373 or email [email protected]. 

About Clay

Clay Elliott is Owner and Principal Financial Advisor at Oak Capital Financial Partners, a financial services firm based in Port Allen, LA, dedicated to providing local financial advice held to the highest standards. Since becoming a financial advisor in 2016, Clay prides himself on working toward his clients’ best interests as a fiduciary. He provides comprehensive financial planning and educates his clients to develop robust wealth management strategies to help them pursue their financial goals. He loves helping people become financially independent and enjoys seeing them live out their financial plan successfully.
Clay holds a bachelor’s degree in marketing from Louisiana State University as well as the CERTIFIED FINANCIAL PLANNER™ designation. He is also an Accredited Asset Management Specialist and a Chartered Retirement Planning Counselor.

Outside of work, Clay enjoys spending time with his wife, Claire, and daughter, Camille, playing tennis, fishing, and attending LSU sporting events. An active participant in his community, Clay is involved with The Emerge Foundation Center for Autism, the West Baton Rouge Chamber as an ambassador and member of the Governmental Affairs Committee, is a board member for the Louisiana Chapter of the Financial Planning Association and West Baton Rouge Small Business Council, and a member of Port Allen Rotary Club. He was also named Young Professional of the Year by the West Baton Rouge Chamber of Commerce. To learn more about Clay, connect with him on LinkedIn.

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(1) The information provided in this post is for informational purposes only and should not be construed as investment advice or a recommendation.