Lockheed martin benefits

Welcome Lockheed Martin Employees

and Anyone Interested in Learning More about Employee Financial Wellness Strategies

At Lockheed Martin, where employees are recognized as the company’s most valued asset, working with them to help them attain financial wellness is a top priority. A select benefit offered to Lockheed Martin employees is the opportunity, through Financial Harvest Wealth Advisors, for employees to genuinely understand their savings and benefits options, and in so doing, utilize strategic opportunities for securing and accumulating wealth, above and beyond the restrictions that limit many types of retirement savings plans.

Although this webpage is customized for Lockheed Martin (LMCO) employees, it’s also beneficial to anyone interested in gaining insights about the ways today’s savvy and competitive employers are partnering with their employees to help their valued teams achieve financial wellness. Attracting and retaining mission-critical talent hinges on employers who, as plan sponsors, equip employees with education, tools, and opportunities to achieve their savings goals while building rock-solid retirement readiness. Learn how your organization can enhance its employee benefit offerings – Contact Financial Harvest Wealth Advisors.

Examples used and IRS contribution limits reflect 2021 federal tax guidelines, which have since been revised.  

Solutions Specifically for You

How willing are you to scale back your current lifestyle when you reach retirement? How much do you want your family to compromise in the event of your untimely death or long-term disability? These are tough but real questions employees and executives must face. And the more your income increases, the harder these questions may be for you to answer without objective, third-party insights and guidance.

We invite you to explore the topics below and then talk with David Witter for 30 minutes. One no-obligation phone call could lead to a significantly more secure future for you and your family.

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Lockheed Martin Salaried Savings Plan - Empower

Will your retirement bring the freedom to expand your life and enjoy new experiences? Most retirement plans, even when supplemented by Social Security, fall short in comparison to pre-retirement earnings. And as you rise in your career, the gap between the amount you can save through traditional retirement plans and the amount you would like to enjoy in retirement grows wider and wider.

One solution for bridging this gap is to utilize after-tax contributions to your Salaried Savings Plan to fund Roth IRAs. To help you save more effectively for retirement, you’ll want to:

  • Maximize your and employer’s contributions to reach overall plan limits. For 2022, these overall limits are $61,000 annually for employees age 49 and under, and $67,500 annually for employees age 50 and over.
  • Review the case studies shown here that present examples of how to fund Roth IRAs with after-tax dollars that grow tax free once rolled over.
  • Recognize that Nonqualified Salaried Savings Plan (NQSSP) assets are not protected from creditors. Plan participants become general creditors to the organization in the event the organization files for bankruptcy. Also, NQSSP can result in a spike in income taxes at the time of separation.
  • The examples below will inspire questions from you about how you, too, can take advantage of this strategy, ensuring that you get your full match and make the most of your 401(k) plan. Contact david@financialharvest.com

Schedule 30-minute Benefits Optimizer Session with the Financial Harvest Wealth Advisors Team:

The three case studies below present two possible scenarios for each of three workers. Case Studies #1 and #2 are applicable to workers age 49 and younger and are based on guidelines and limits set by the IRS for the 2022 tax year. In Case Study #1, the executive is age 38, while in Case Study #2 the executive is age 43. The third Case Study looks at an executive who is age 50 and positioned to take advantage of the IRS permitted catch-up options for workers age 50 and above.

In all three examples, Option A represents c-suite executives who want to utilize their 401(k) plan with few if any dollars going into their nonqualified plan. Option B shows scenarios for c-suite executives who want to optimize and get every penny possible into their 401(k) plan and don’t mind if some of their deferrals and even some of their company match spill into their nonqualified deferred compensation plan.

401(k) Modeling Case Study – 49 and under (#1)

Age 38, overall limit – $61,000
Base$230,000
Bonus$60,000
Total Compensation before LTI$280,000
Max 4% Match$8,800

Company Match:
10% Total

401(k) – company match

401(k) – Other company contribution

Option A

SSP 401k
9% Pre-tax (Capped at $20,500)$20,500
7% After-tax$16,100
4% Match (On base pay only)$9,111
Other 6% Contribution (On base pay only)$13,800
401k Total$59,511
NQSSP
Compensation when switched$227,778
  
16% NQSSP deferrals (no bonus deferred)$555.51
4% Match$89

Option B

SSP 401k
10% Pre-tax (Capped at $20,500)$20,500
8% After-tax$18,400
4% Match (On base pay only)$8,200
Other 6% Contribution (On base pay only)$13,800
401k Total$60,900
NQSSP
Compensation when switched$205,000
  
18% NQSSP deferrals (no bonus deferred)$7,000
4% Match$1,000

All examples used in this document are hypothetical and are for illustrative purposes only.

401(k) Modeling Case Study – 49 and under (#2)

Age 43, overall limit – $61,000
Base $300,000
Bonus $80,000
Total Compensation before LTI $380,000
Max 4% Match $12,000

  

Company Match:
10% Total

401(k) – company match

401(k) – Other company contribution

Option A

SSP 401k
7% Pre-tax (Capped at $20,500)$20,500
3% After-tax$9,000
4% Match (On base pay only)$11,714
Other 6% Contribution (On base pay only)$18,000
401k Total$59,214
NQSSP
Compensation when switched$292,857
  
10% NQSSP deferrals (no bonus deferred)$714
4% Match$286

Option B

SSP 401k
7% Pre-tax (Capped at $20,500)$20,500
4% After-tax$10,786
4% Match (On base pay only)$11,714
Other 6% Contribution (On base pay only)$18,000
401k Total$61,000
NQSSP
Compensation when switched$292,857
  
11% NQSSP deferrals (no bonus deferred)$714
4% Match$286

401k Modeling Case Study – 50+ (#3)

Age 50, overall limit – $67,500
Base$320,000
Bonus and LTI$140,000
Total Compensation$460,000
Max 4% Match$12,800

Company Match:
10% Total

401(k) – company match

401(k) – Other company contribution

Option A

SSP 401k
6% Pre-tax (Capped at $20,500)$20,500
Catch-up$6,500
2% After-tax$6,500
4% Match (On base pay only)$11,714
Other 6% Contribution (On base pay only)$19,200
401k Total$64,414
NQSSP
Compensation when switched$292,857
  
9% NQSSP deferrals (no bonus deferred)$2,443
4% Match$1,086

Option B

SSP 401k
8% Pre-tax (Capped at $20,500)$20,500
Catch-up$6,500
4% After-tax$10,250
4% Match (On base pay only)$10,250
Other 6% Contribution (On base pay only)$19,200
401k Total$66,700
NQSSP
Compensation when switched$256,250
  
12% NQSSP deferrals (no bonus deferred)$7,650
4% Match$2,550

Universal Group Life Insurance at Lockheed Martin

Group life insurance provided through your employer is an extremely worthwhile benefit. Lockheed Martin offers its employees excellent group life insurance options that establish a baseline of coverage. In fact, many employees and executives assume that their existing policy would adequately provide for the needs of their beneficiaries.

But ‘doing the math’ often reveals surprising gaps between your insurance policy payout and the amount of money your loved ones would need for the years ahead in the event of your passing.

You and your family logically consider your incentives and bonuses as part of your total compensation. Omitting them from the formula in determining your income replacement objectives skews the math. And the higher your earnings, the bigger your shortfall may be. Highly compensated employees (HCEs) frequently discover that they are among the most underinsured workers in the workplace.

Reality Check: Your life insurance policy is based on your qualified pay, which means it does not include your bonus pay or your vesting Long-Term Incentives (LTIs).

Consider this example:

Lockheed Martin HCE Elizabeth earns $280,000 annually in base pay. Elizabeth’s bonus pay is $125,000 annually, plus she receives $195,000 in LTI vesting. While Elizabeth’s qualified pay (her salary) is $280,000, her annual total compensation is $600,000.

$280,000 Base pay
$125,000 Bonus
$195,000 LTI vesting
$600,000 Total Compensation annually

Elizabeth’s group universal life insurance policy selection is 4x her base pay or: $280,000 x 4 = $1.12 million

But in evaluating the number of years of future income Elizabeth needs to replace in order to assure her family’s financial security, her coverage shortfall becomes very obvious.

Using the 10x rule, Elizabeth’s optimal coverage should be: $600,000 x 10 = $6 million

Elizabeth is underinsured by $4.88 million!

Solution: Purchasing a supplemental individual term life insurance policy (in addition to your employer-offered benefits) can take you from underinsured to confidently and comprehensively insured. And while group life insurance premiums typically increase each year, purchasing an individual level term policy keeps your cost stable … and your peace of mind high.

Level term life insurance guarantees that you pay the same price for your policy for the entire length of the term, often 20-30 years, plus your death benefit never changes. The Financial Harvest team can help you evaluate the number of years of income you need to replace, your true total compensation value, and your options to purchase a supplemental individual policy to alleviate the gaps, and the worries.

Schedule 30-minute Benefits Optimizer Session with the Financial Harvest Wealth Advisors Team:

Long-Term Disability Insurance (LT disability)

Reality Check: Your long-term disability policy is based on your qualified pay, which means it does not include your bonus pay or your vesting Long-Term Incentives (LTIs).

If the American workforce took any one lesson away from the pandemic it was that sometimes in life, the most unanticipated events happen. No one expects to become permanently disabled, yet according to data from the Social Security Administration, prepared by the Center on Budget and Policy Priorities, a 20-year-old worker (in 2020) has a one in three chance of death or disability before reaching retirement at age 67.

Long-term disability insurance protects your income. In so doing, it can protect your future and that of your spouse and children. But most workers do not have sufficient LTD insurance to allow them or their family to go forward without significant disruption and changes to their current quality of life.

Schedule 30-minute Benefits Optimizer Session with the Financial Harvest Wealth Advisors Team:

Example:

Samuel is a highly compensated employee at Lockheed Martin. He earns $280,000 in base pay, with bonus pay of $125,000 annually, and $195,000 in long-term incentive vesting, which brings his total rewards pay to $600,000 annually.

$280,000 Base pay
$125,000 Bonus
$195,000 LTI vesting
$600,000 Total Compensation annually

Samuel’s current long-term disability is 60% of his base pay. Sixty percent of $280,000 is $168,000 annually or $14,000 monthly, which for Samuel would represent a substantial reduction in his pre-disability earnings. Would this amount be sufficient to provide for the added costs of living with a disability? How would $14,000 stand up to inflation, and would Samuel still be positioned to provide for his children’s educational needs and any number of other plans he and his spouse had for their family?

Each employee must evaluate the financial value and the personal assurance that comes with purchasing a supplemental plan to cover the gap income not currently covered by his or her employer’s LTD plan.

Lockheed Martin Health Savings Accounts (HSAs)

Many Lockheed Martin employees have access to Health Savings Accounts that offer the “triple crown” of tax savings. Health savings accounts (HSAs) are tax-deductible savings plans that enable employees to put aside pre-tax dollars for healthcare expenses that may arise in the future or even after retirement.

Here’s how this tax savings triple play can work for you:

  1. Contributions to your Lockheed Martin HSA are excluded from earned income, making them non-taxable. They remain untaxed as long as you use them for a qualified medical expense, such as your health insurance deductible, copayments, coinsurance and most medical expenses.
  2. Contributions to your Lockheed Martin HSA are excluded from Federal Insurance Contributions Act (FICA) taxes for Medicare and Social Security.
  3. Funds within your Lockheed Martin HSA can be invested for tax-free growth, just like a Roth IRA.

Good to Know

  • Participants in the LMCO Health Savings Account can contribute to their HSA for the previous tax year, up through the tax deadline (typically April 15) of the following year.
  • The money, and the earnings in your HSA are yours, including any contributions made by Lockheed Martin. If you leave the company, the full value of the account is still yours.
  • Unlike a Flexible Spending Account, the money in your Lockheed Martin Health Savings Account rolls over without expiration or penalty, year after year.

Most Lockheed Martin employees can participate in this triple tax-advantaged HSA available in coordination with a high deductible health insurance plan offered through LMCO. However, regulatory guidelines established by the federal government state that employees cannot participate in any HSA if they are enrolled in Medicare, covered by medical benefits from the Veterans Administration, and a few other specific exclusionary conditions. Other requirements also exist, including age limits and contribution limits.

HSA Annual Contribution Limits2022
HSA Employee Contributions for Individual Coverage Plans$3,650
HSA Employee Contributions for Family Coverage Plans$7,300 ($140.39 weekly)
Employees who are age 55 and older can contribute an additional $1,000 per year.
Employees whose spouse is 55 or older may establish a separate HSA and make a catch-up contribution to that account.
Employer HSA Account Contributions2022
LMCO will contribute annuallyUp to $1,500
LMCO will contribute additionally per employee (conditions apply)$500
LMCO will contribute for employee’s spouse (conditions apply)$500

 

More About Health Savings Accounts

Regulated by the Internal Revenue Service (IRS), additional information about Health Savings Accounts (HSAs) is available at IRS.gov. (Search: “HSA” for this year’s most up-to-date regulatory guidance.)

Schedule 30-minute Benefits Optimizer Session with the Financial Harvest Wealth Advisors Team:

Email david@financialharvest.com
Or, schedule now:
30-minute video meeting
30-minute phone meeting

Assess gaps created for your family with your current life insurance and long-term disability plans.

Remember to rollover after-tax contributions.

Consider how your Non-Qualified Salaried Savings Plan (NQSSP) may be subject to creditors, as well as the plan’s future tax consequences.

Contact Us

Your Unique LMCO / Financial Harvest Wealth Advantage

As an employee of Lockheed Martin, you are already ahead of the game. An innovative and forward-thinking organization, LMCO is committed to holistically supporting its employees for both personal and professional growth.

The team at Financial Harvest Wealth Advisors is proud to have earned the privilege of providing our services and financial advisory expertise to LMCO’s valued employees. For many LMCO employees, we’re local. Our Winter Park, Florida offices are less than 15 miles from Lockheed Martin’s Orlando complex on Sand Lake Road. And whether we serve you face to face or via our digital platforms, we are committed to ensuring that you have the answers you need for sound and confident decision making to help you build and preserve wealth.

Directions & Contact

1091 W. Morse Blvd., Suite 200
Winter Park, Florida, 32789

407-937-0707
info@financialharvest.com

Lockheed martin benefits

All examples used in this document are hypothetical and are for illustrative purposes only.

Financial Harvest Wealth Advisors creates a safe environment in our office for visiting clients by practicing social distancing, wearing masks, and we have installed UV lights in our A/C system. Or, we'll work with you via Zoom or telephone conference. Your health, well-being, and peace of mind is our primary concern. 
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