In Northeastern Pennsylvania, it’s not unusual to meet someone who started at Procter & Gamble early in their career and stayed for 30 or 40 years. That kind of dedication builds more than just a career—it often builds a significant retirement nest egg.
For many long-time employees, a large portion of that nest egg is in company stock. That can feel reassuring. You know the company. You helped build its success. And the stock may have performed well for years.
But when a large portion of your retirement savings is tied to a single company—even a strong one—it’s worth stepping back and asking an important question: Is too much of your financial future tied to one place?
Understanding Concentration Risk
We often see retirees with a strong pension and a sizable company stock position. That’s something to be proud of. But holding too much of one stock can create concentration risk, meaning several parts of your financial life may depend on the same company.
For example, you might have:
- Your career income from the company
- A pension tied to the company
- Retirement savings invested heavily in company stock
- Health or retirement benefits connected to the same employer
When so many pieces depend on one source, changes in the market—or at the company itself—can have a larger impact than many people realize.
That’s why many retirement strategies involve gradually diversifying investments over time. The goal isn’t to move away from a company that helped build your career. It’s simply about protecting the retirement you’ve worked decades to build.
Retirement Planning Goes Beyond Investments
Investments are important, but they’re only one part of the picture. Some of the biggest risks to retirement come from unexpected life events. That’s where income and asset protection can play a role in setting you up for the retirement you envision.
For many families, this conversation includes:
- Disability protection in case an illness or injury affects your ability to work
- Life insurance to protect a spouse or family
- Long-term care planning for potential health needs later in life
Interestingly, many people already have what they consider a long-term care plan. When we ask about it, the answer is often: "We’ll pay for it if we need it."
That’s technically an option—but it differs from a true long-term care plan. Paying out of pocket may not always be the most efficient or predictable solution, especially considering that nearly 70% of individuals over age 65 will require some form of long-term care[1], and care costs are continuing to rise, with a private room in a nursing home now averaging nearly $100,000 per year in many areas.[2]
Exploring strategies beyond self-funding, such as incorporating a long-term care insurance policy or combining personal savings with insurance (and, if needed, Medicaid), can help protect retirement assets from being depleted too quickly if care is needed.
Don’t Forget the Tax Side of Retirement
Another important piece of retirement planning is taxes. Depending on how your retirement accounts are structured, taxes can play a significant role in how much income you actually keep in retirement.
Strategies that may be worth exploring include:
- Roth IRA contributions, when income levels allow
- Backdoor Roth strategies for higher earners
- Roth conversions that shift funds from tax-deferred accounts into tax-free accounts over time
Sometimes, this process begins with setting up a traditional IRA and then strategically converting those funds. The goal is to create more tax flexibility later in retirement by paying the taxes now versus at withdrawal, when income sources and tax bracket may change.
Because these strategies involve both tax and financial considerations, they’re best discussed as part of a broader plan rather than handled separately at tax time.
Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.
A Strong Plan Brings Everything Together
Over the years, we’ve found that the most effective retirement strategies usually include three core elements working together:
- Tax planning to help manage future liabilities
- Financial planning to guide long-term decisions
- Insurance and risk protection to help safeguard what you’ve built
When these pieces are coordinated, families often gain greater clarity—and confidence—about their financial future.
Planning for the Next Chapter
At Aliciene Tax & Financial Solutions, helping local families prepare for retirement has been part of our story for generations. Our focus has always been the same: helping people protect what they’ve worked so hard to build.
If you’ve spent decades building retirement savings that include company stock, a pension, and other benefits, it may be worth taking the time to make sure all the pieces of your plan are working together.
Because retirement isn’t just about what you’ve accumulated. It’s about how confidently you can move into the next chapter of life.
All investing involves risk, including the possible loss of principal. There is no assurance that any investment strategy will be successful. A diversified portfolio does not assure a profit or protect against loss in a declining market.
[1] U.S. Department of Health and Human Services
[2]Pennsylvania Agency of Nurses