The Great Resignation

If you could have a candid conversation with financial advisors who have decades of experience helping professionals, business owners, and families just like yours plan for their financial future, what questions would you ask? I'm Chip Munn, financial advisor, author, host, and CEO of Signature Wealth Group. For decades, my partners and advisory teams have had the opportunity to answer the tough questions for hundreds of our clients. Now we want to do the same for you. On the Signature Life Show, you'll hear answers to your burning and most perplexing finance, investing, and retirement questions from our Chief Investment Officer, Senior Wealth Advisors, Certified Financial Planners, and more. We aren't just financial advisors. We're parents, children, community leaders, and entrepreneurs with a passion for helping empower our clients to live life intentionally. What we call a signature light.

John Tate, what's up, man?

Chip Munn, it is Friday. It's not sunny outside, or at least not today, but, uh, you know, I'll take what I can get. It is Friday, so that's a good thing.

Yeah, you know what, sunny on the inside. It's always sunny here in podcast land, so that's the way that I look at it, man. The flowers need the rain. The farmers around here have been incredibly happy on the Facebook about the rain. So it's nice to have it every now and then. It makes you appreciate the sunny weather that much more.

I mean, that's a rarity in and of itself to find somebody that's sunny about anything on the social media platforms that are out there. Usually it's all negative doom and gloom, right?

That's right. Well, and I do want people to know that I intentionally called it the Facebook. I'm not that disconnected, but my kids like it when I do that. So it's kind of one of those things. John, before we got on, you and I were talking about some team building stuff. And I joked that there are a lot of people trying to figure out building new teams these days because of kind of what we want to talk about today, the great resignation or the great reshuffle or whatever it is that we want to call it. I'm talking to a lot of people these days who are either interested in or who have gone through making a change.

Whenever I think about teams, I immediately think about sports teams. It doesn't just immediately jump to the people that I work with on a daily basis, but in the sports world, if you know anything about Major League Baseball, July is the month of deferred compensation payments. Probably the most famous July compensation payment is from the Mets to a player, Bobby Bonilla, that you may remember from years back. The last time he played with the Mets was in 2000, and they owed him about $5 or $6 million. I don't remember the exact number, but believing they were going to make significant profits, they being the Mets, because they had a large amount of their investments with a man you might be familiar with named Bernie Madoff, they agreed to defer Bobby Bonilla's $5.9 or $6 million payment that year for 10 to 11 years, and they guaranteed him 8% per year interest. On that money and they spread it across 25 years. So every year from 2011 to 2035, he gets about $1.2 million and he hasn't played since 2000. So he'll continue to get that money through age 72 for him. And I know not all of our clients have deferred compensation payments like that, but it's always interesting to see how that kind of ties together and how people can make decisions based on what they think their investments are going to do.. And then it doesn't necessarily turn out to be fraudulent per se, but it doesn't always turn out like they think it's going to turn out, at least in the short term. So I think we all think Bobby Bonilla is going to be fine and all of that, but there are different things that you need to pay attention to when you are changing jobs. And it might not be a deferred comp payout, although there is some of that to be done with some of our clients. But if you look back to 2021, we had the highest average number of workers quit their jobs. About 4 million workers quit their jobs per month in 2021. And it had a lot to do with vaccine mandates, or it could have been the ongoing pandemic that never seemed— every time you thought COVID was dying away in one area, it would pop back up in another in a different way, shape, or form. So that could have been it, or just could have been in general a strong job market because employers were looking for people to fill positions because of the increased demand, because people had money to spend, the stock market was going up, home values were increasing. I mean, there was a lot of liquidity opportunities in the economy in 2021, and that was a reason that people were making changes. But I think what we're seeing today may be a little bit different. Maybe the job market has tightened up, you know, just a little bit and start to favor employers a little bit more. I'm not sure it's so much more that it changes the script completely. From 2021.

No, I tend to agree with you. I was talking to a client yesterday whose college-age son was home from college and had applied. Yeah, everybody has help wanted signs out, and he applied for lots of stuff, and the only things that he got offered were food delivery type positions. And so I think that employers are able right now to be a little more selective than they were because my only assumption With regards to why that situation was, was because it was only going to be summer work. But we've seen plenty of situations. I was talking to somebody the other day where they had candidates who quit before their first day and pick something different. So it's interesting. Before we move on, and I know it's a little bit of a tangent, John, I don't know if you're a baseball fan, but you brought up baseball and we're talking about the great resignation. I want to point out as a lifelong Braves fan that one of the strangest, greatest resignations was Freddie Freeman. Not re-signing with the Braves this year and going to play with the Dodgers. It came out recently, I don't know if you've seen this, that unbeknownst to him, he had an offer from the Braves. His agents kind of overplayed their hand, and before Freddie knew it, the Braves signed a different player, essentially eliminating him from being able to come back when he probably would have taken the deal. And so, are you familiar with that? I don't know if you follow baseball.

I am, I've been reading it. I mean, it just seems a lot to have to do with his agents, obviously. Behind the scenes without really talking everything through with him. Because I think he fired his agent, right?

Or if he hasn't already, he's going to. And it just reminded me when you brought— I hadn't thought of it until you brought up the Bobby Bonilla. And we don't talk about this much on the show, and we'll jump back into the Great Resignation. But I was pretty sour about the Freddie Freeman thing, particularly when I found out that his agents weren't working in his best interest. And ultimately, he would have much preferred to stay in Atlanta the person representing him wasn't as interested in his goals as they should have been. And so as we're talking through this, I think it's important for our listeners to remember that as you're selecting a financial advisor, that all of these things that we talk about should center around you and what you want. That's the whole purpose. We talk a lot, John, about the Signature Life. And I remember when I read the article about what had gone down with his agents, it's like, this guy's in his 30s. I mean, it's like you stole this man's Signature Life. He's got to uproot his family and move, and he's in a contract for 7 or 8 years with a team he didn't want to play. You know, wow. In real life, for our clients who aren't professional baseball players, things can take a left, but it shouldn't happen because the people who are entrusted with working with you on your goals aren't paying attention to what's important to you.

Right. And I think that's part of the whole touchpoint system we have, everything that we have, all the processes we have in place to talk with our clients and in some cases, I'm sure our clients would say exhaustively, talk about some of the things they probably don't want to talk about it anymore as much as we touch on all the things we try to do that are in their best interest. But it is important to have those conversations, you know, as often as you want to, and we make it a point to bring it up. And I think if you are thinking about leaving your employer or doing things like that, I mean, I saw an article this morning about the effects of leaving an employer, you might leave a 401 behind, or you might not fully understand what your pension benefits are, or things that it might seem like a good idea to jump ship for a 5% increase of pay or additional benefits or health benefits or other kind of fringe benefits or bonuses. But really understanding the amount of money that's in your 401, where that money has come from, how much of it you actually get to carry with you and keep, And the same goes for your pension as well, if you have one of those with your employer. It's not just as simple as sometimes as just flipping the switch and saying, "Well, I like what I do here, but I can go over here and do it for 5% or 10% more." Sometimes there's more to it. And those are the kinds of things, those big picture questions, those big picture conversations that we tend to have with our clients that they may still make the decision to change jobs, but at least they're doing it and there won't be any surprises afterwards.

That's the thing is that sometimes it can have unintended consequences. And again, like Freddie Freeman telling his agents just to work it out, the unintended consequence is now he's a Dodger. And so to your point, there can be all kinds of things that we need to be aware of when we're changing employers. And I think on the employer side, just for reference, most of the folks that we're talking to probably fall into the employee. They're not necessarily HR directors. But on the employer side, a lot of things are changing to benefit the employees because the workforce is changing. Spoke to an HR manager this week who was talking about some of the changes that her company was making to be accommodative in policies because of the workforce changes. But John, there are lots of things that sometimes we can kind of overlook when it comes to changing employers. One of the biggest ones comes to your 401 plan. 401 plan is a major benefit, and most employers have them. But one of the things we see a lot— and in fact, I think I saw a study that said in 2021 there were 25 million, what we'll call kind of, and I'm air quoting, forgotten 401 plans.

It's good that you call out the air quotes because we have to remember that people can't really see us all the time. But yes, it's basically 1 in 5 dollars of all US 401 assets are in accounts that either haven't been looked at, decisions made on anything, and no money is going in, and it's apparent that they're orphaned. And so, you know, maybe people don't know how to track it down or what to do. So we'll kind of go through that list. But if you're changing jobs, or if you've changed jobs several times over the past few years, you know, you were putting money in, you think you were having money deferred, maybe you don't know. Not everybody pays attention to that. The easiest way to start, I would say, is to contact the HR department, like you said before, and just simply ask. Old statements will have the plan administrator phone number and account number. Usually accounts are required to mail you or send you an annual statement at least once a year, even if you're not putting in any money. So finding an old statement can help. Contacting the HR department can help. If you don't know what to do with your 401, you can obviously find an advisor and we can help you make that decision. But if you don't know what to do with it and you're not ready to make a decision yet, the most important thing you can do with that old account is make sure your mailing address is current because low account balances, for example, balances less than $1,000, your old employer can simply close that account and mail you a check for the balance. And if that address is not current, they're going to be mailing that check to somewhere where you're not going to see it, or either somebody else may cash it or something. I would say the odds of that happening are pretty low, but you won't get it. And so what you would need to do on that is Your previous employer should be able to confirm whether or not they mailed a check if you didn't get any money, but hopefully the address is current. And then the other case that I've found is that if you leave a 401 with your old employer for an extended period of time, maybe your old employer was merged with another company that combined 401s or moved it to a different platform. You can no longer log in and look at it. There is a searchable database that you can use online. It's called the National Registry of Unclaimed Retirement Benefits. You can pretty much search any of those words. You can search by your Social Security number, first or last name on that National Registry of Unclaimed Retirement Benefits website. And so you can find out if your old 401 is still out there, if you still have assets. And you can also use a site called FreeERISA to track it down. And that's the Department of Labor's abandoned plan database in case the company went out of business or did something else. And so there are plenty of ways to track it down. I've certainly helped clients go through and track down if they're not sure here in the office. I'm sure you've done the same thing, Chip, but it is something that if you're changing jobs, you know, you're putting away money, it's something to keep track of and not simply forget about.

Yeah. And the other part of that is there's still some companies, John, out there that offered pensions, or maybe they did and they don't anymore, but you were still qualified. For a lot of our listeners who are maybe in their 50s or 60s. It's one of those things where particularly what I find, John, is maybe you were with the company for 25 years, but there were several mergers in there, and you may have a pension from kind of 3 companies ago, even though you never left your desk. So those kinds of things I've seen many times where people seem to be more at least mindful of their 401. Now they may mindfully choose to leave it behind, but there are oftentimes little bits of pensions. Again, where I live, Sunoco Products is a Fortune 500 company right up the road. And most of the folks at Sunoco are really aware of their pension because it made up for a lot of people a big part of their retirement. But for a lot of folks, there've just been smaller partial pensions. And I find, John, those to be much easier to forget because sometimes they're a few hundred or $1,000 a month in some cases, not $100,000 or $200,000 or $500,000 lump sum like a 401 plan. They seem easier to forget.

Well, yeah. And I think one of the things I've heard you say more than once is when you pay, you pay attention. And so with the 401, you're actively deferring your own pay in there. And so I think people have the tendency to pay more attention to that. With pension plans, it's usually the employer putting money in on your behalf. So while it is technically your money, it's not money you would ever see or even have a decision to control how much goes in or what. And so usually that kind of makes it easier to set it aside in your mind and say, "Well, I don't have to pay any attention to that right now because A, I'm not putting in any money, and B, I can't take it anywhere if I do anything later. And so we'll just let that alone until I'm ready to retire." So that's not usually the way that we would recommend thinking about it, but One of the things with pension plans that's interesting is the period over time in which they vest. And vesting, what you want to remember there is if something was 100% vested, that means 100% of it is yours, so to speak, and can be calculated towards an income stream later that can be used during your retirement period. But what's called cliff vesting means that if you leave your job in 5 years or less, you can lose all the money that the employer has set aside for your benefit. If you leave after 5 years, then 100% of what they've set aside is yours at some point in the future. Um, another form of vesting is called graded vesting. And with this kind of vesting, at a minimum, you're entitled to 20% of your benefit if you leave after 3 years, and each year that you stay after that, they add on another 20%. So That is a good question when you start with a new employer, if they have a pension. And I think Johnson Johnson still offers one to some of their employees, because I've got at least one client who's accruing a pension with them. But if you start off with a new employer or you have a pension plan that you know of and you just have never asked any questions about it, now is always a good time to ask some questions. But asking them what kind of vesting schedule that they have is always good information to know so that that can sometimes enter into the decision-making process of whether you stay put for another a few years so you can get 100% vested, or if you go ahead and leave and take a different job. So those are the kinds of things that I would be asking the HR department about if I had a pension or was wondering what that benefit looked like. Yeah.

And I think where we are going is just to reiterate the point that everything's not about the salary or the hourly figure. So it's important just to ask these questions, to pay attention. And if you make a change, and again, John, I'm glad you pointed out just changing your address because I still get mail for people who don't live with me, and I just throw it away. So it could be a check, but I don't open their mail. I just throw it away. So it could very well be something as simple as changing your address. There's a small list of things, and if you want, just reach out to John and I. We're happy to share them with you. That it's really easy as you're changing jobs. There's a checklist of things that's worth just going through. Small stuff. Again, things like just changing your address. And whether that's that you're moving from one town to another or just a job across town, making sure that your new job is going to affect your retirement, even if it's just by offering different options. And so make sure that as you're making these changes, these are some of the things that you're asking about, whether you're asking your advisor, whether or not you want to ask us, make sure that you're paying attention as you're weighing options, the HR departments, But again, it's easy to focus on the top line number, but as we've seen, those can change a good bit as the job market changes. As you're looking at the benefits offerings, you just want to be making sure that to the extent that you can, you're looking at the total situation in terms of apples to apples. John, anything in wrapping up?

I think if you go out and simply just go to Google and type in 401 rollover, people make a living just writing articles about 401 rollovers because it is such a big part of everyone's life at this point. And most of those articles have to do with additional fees or fund changes or everything like that. And some of the articles indicate that by just simply by rolling your 401 over and not paying attention to some of the details in the IRA that you're putting in, that you could somehow be charged additional fees over time that would reduce your 401 balance. And so while it is an easy key action to take, rolling your 401 from a previous employer over to an IRA, is something we don't take lightly. And we do focus very heavily on the fees that are being charged, the funds that we use, and how expensive it is for the client. Because what we want to do ultimately is have that 401 be a major part of your goal plan and your signature life in retirement. And in order to do that, we need to pay attention to all these details. So even if you don't want to pay attention to the details, just know that we're going to do all that work for you. And if you want to come talk to somebody, we'll address all of the things that any of these articles can talk about online. That kind of like going to WebMD and trying to figure out what's wrong with your body— you can scare the heck out of yourself just by doing that. Come talk to us, we'll make it an easy, simple process for you.

That's right, John. Let's do it again next week. Next week.

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