Newspapers / State Port Pilot (Southport, … / July 20, 1994, edition 1 / Page 27
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__The State Port Pilot _ BUSINESS UCB’s Randy Huggins and Phillip Presson were pleased Monday to award a color television to Anne Price, who won the device in a July 15 drawing at the grand opening of the downtown Southport branch’s automatic teller machine. Innovative Ideas Advertising and Design held its grand opening last week in the Town Gate Shopping Center, Southport. Participating in the ribbon-cutting were Lynne Repscha, representing the Southport Oak Island Chamber of Commerce; Foxy Howard; Chris Howard, president; Jeff Howard; Mag Ferrell; Norman Holden, Southport mayor; Jeff Howard; Reece Howard; and Rob Gandy, Southport city manager. The grand opening of Philomena Moultrie’s was held last week in the General Superstore Plaza in Long Beach. Participating in the event were (left to right) Lynne Repscha, Southport-Oak Island Cham ber of Commerce vice-president for business development; Joan Alt man, Long Beach mayor; Dianne Vereen and Jennie Ennis, co-owners; Wayland Vereen, Brunswick County commissioner; and Dave Kelly, external relations manager at CP&L’s Brunswick nuclear plant. l High Credit Card Debts? Large Hospital Bills? Bankruptcy May Help. Contact ' William D. Ezzell, Attorney (910)457-9586 • (910)253-5600 Money Management Employee must weigh early retirement plan As companies across the country continue to trim their workforces, thousands of workers face the op portunity to trade their jobs for en hanced early-retirement deals. What should you do if your employer offers you what seems like a pot of gold in exchange for your early exit from the company? According to the North Carolina Association of CPAs, even the best early-retirement package involves important career and financial stakes that dictate careful scrutiny of the package’s pay and benefit terms. According to CPAs, if you’re pre sented with an early-retirement of fer, the first issue to address is whether you really have a choice. Is your company looking to reduce numbers in general, or is it targeting specific individuals or departments? Is it likely that outright layoffs will follow the voluntary early retirement offers? Your decision-making process should begin with a realistic assess ment of your job security, your pros pects and marketability, and the fu ture of your company. Assuming the early-retirement offer is voluntary, the next step is to carefully evaluate the package you are offered. Evaluating Early Retirement Packages Early-retirement packages generally tempt employees with a combination of benefits. In most cases, the package is built around a "sweetened" pension and may be supplemented with such extras as a cash payment, post-retirement health benefits and help in finding a new job. When calculating your retirement benefits, most companies enhance your future pension by "adding" years to your age and/or crediting you with extra years of employment A few additional years in a pension can significantly increase your retirement payout. For this reason, it’s important that you compare what you’re being offered against what you would get if you stayed on the job. A valuable exercise is to balance all the income and expenses of con tinuing to work against those of retiring to see how much more you stand to earn by working as opposed to retiring. Some individuals may find that when the costs of commut ing, clothing and other work-related expenses are factored in, continuing to work makes only a marginal dif ference in their income. To determine whether you can af ford to retire early, you’ll need to take a hard look at your anticipated expenses and income during your post-employment years. While cir cumstances vary, CPAs and other experts agree that most retirees will need 70 to 80 percent of their pre retirement salary to maintain their standard of living. In estimating your income needs, be sure to consider the benefits you can expect to receive from Social Security and your company pension, as well as any savings and invest ments you have earmarked for retirement. Don’t Overvalue Cash Payouts To make early retirement more at tractive, particularly for younger workers, some companies offer The State Port Pilot J&Pilot Line THE TALKING NEWSPAPER lump-sum cash payments. Typically, cash payments are based on a for mula that takes into account salary and the number of years you’ve worked for the company. If you’re younger and the package means a job change rather than retirement, be realistic about your chances of finding a comparable job before your cash payment runs out. Benefit Terms Are Important Factors Some of the better early retirement packages include company-paid medical insurance coverage for a specific time period, although rising medical costs are making this benefit increasingly rare. However, federal law requires that all Companies with 20 or more em ployees offer departing workers continued health insurance coverage for 18 months. In such cases, the employee picks up the cost of this coverage but pays a premium based on the company’s group rate (plus an administration fee of up to two percent). After that, you’re on your own, so carefully consider the cost of paying for your own medical in surance. Consider Taxes When Sizing Up Your Offer Finally, CPAs urge you to consid er the tax implications of accepting an early-retirement offer. Your com pany is required to withhold 20 per cent in taxes from lump-sum pen sion distributions, unless you re quest the money be transferred directly to an Individual Retirement Account (IRA) or another qualified retirement plan. What’s more, if you hold onto the cash, in addition to the income tax you’ll be subject to a ten-percent, early-withdrawal penal ty if you are under the age of 55 in the year you leave your job. For these reasons, it’s especially important to seek some professional advice before cashing in on an early-retirement offer. Money Management is a weekly column on personal finance prepared and distributed by the North Carolina Association of Certified Public Accountants. THE RIGHT PROTECTION For the times of your life. A growing family...a home mortgage.. children's education... retirement. As the various stages of your life change, so do your financial needs. Nationwide's Life Needs Analysis is a free review de signed to identify your financial protection needs (today's and tomorrow's) so that you can decide how best to use your resources for financial security. Call us today. Doyle Dennis 801 N. Howe St., Suite 9 Southport, N.C., 457-6788 NATIONWIDE INSURANCE Nationwide is on your side Nationwide Mutual i^su'iV ce Company and Affiliated Companies Home Office One Nationwide Pia/a Coiumpus Oh 4321$ Nat-o-'wide s d registered federal sea-ce math of N.it'0-iM'de Mufua1 insurance Company HUNGRY FOR RESULTS? Announcing Our New "Menu" of Higher Savings Rates! Come in and see one of our officers for the highest yields around. 6 Mo. CD 4.08% Annual Yield 3 Yr. CD 5.87% Annual Yield 2 Yr. CD 5.76% Annual Yield 5 Yr. CD 5.92% Annual Yield AH certificates of deposit earning the indictaed yields require a minimum deposit of $500. *Withdrowol prior to maturity will result in a substantial penalty. **Rate$ are accurate as of July tl, 1994 and may change without prior notice. tftu »owi.»; LLISJJ. Security Savings Bank SSB FOR FINANCIAL INFORMATION CALL PILOT EXT. #233 Southport • Leland • Lona Beach • Calabash • Shallotte "Brunswick County's Oldest Financial Institution"
State Port Pilot (Southport, N.C.)
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July 20, 1994, edition 1
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