Strata Capital

Strategic Wealth Management | Fairfield, NJ

Personal Financial Management for MetLife Executives and Professionals

Balancing Your Career at MetLife with Personal Financial Well-Being

A career at MetLife is challenging and rewarding, requiring substantial dedication and hard work. In return, MetLife offers generous benefits and compensation packages. To fully realize these benefits, it’s crucial to leverage every opportunity provided.

Strata Capital’s financial advisors have over a decade of experience working with MetLife professionals. Having started their careers at MetLife before the sale of the Premier Client Group, they deeply understand and respect the balancing act between work and personal life. Strata Capital has invested significant time and resources to thoroughly understand MetLife’s benefits and opportunities, ensuring a comprehensive and insightful planning experience for you.

Why MetLife Employees Choose Strata

PROVIDED GUIDANCE TO

400+

MetLife Employees

ADVISED ON

$100M

of MetLife Employee wealth

Why us?

Because we understand you…

Not only have we worked at MetLife, we’ve devoted the past 13 years to serving its most valuable resource, its team members…

Your benefits are an asset, especially when you align them with your personal plan.

Working with Strata Capital will help you make sure you’re getting the most out of them.

• Personal financial management that incorporates your company benefits
• Stock compensation planning and tax management
• Planning your retirement or departure from the company
• Access to our MetLife specific financial education resources
• Technology that helps you stay on top of everything that you own on one website
• Professional investment management and access to private investments

How Well Can You Answer These Questions?

  • How much will I need to save for retirement?
  • How do I recreate my paycheck in retirement?
  • How do I get the most out of social security?
  • What is the best strategy for how to collect social security
  • How do I make sure I have good Health Insurance that won’t cost too much in retirement
  • How do I use the company’s stock compensation and deferred compensation plan to maximize my retirement?

Don’t Feel Like Reading Through Your Benefit Documents?
We’ve Got You Covered.

INTRODUCING

A masterclass designed exclusively for MetLife employees to understand their benefits, maximize their wealth and take control of their personal finances. Plus, enjoy a coaching session with a Strata advisor to apply this to your unique situation.

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Maximize Benefits. Retire Confidently.

Understand Your Benefits

Your company has a very generous employee benefit package. The one’s that understand and take advantage of everything MetLife has to offer are the ones who control there future.

401(k) Plan

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401(k) Plan Auxiliary Match Plan

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Traditional Formula Pension

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Personal Retirement Account (PRA)

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Auxiliary Retirement Plan (Aux Plan)

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Leadership Deferred Compensation Plan

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MetLife Stock Compensation

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Health Insurance

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Tying It All Together

Your compensation at MetLife goes far beyond what gets deposited into your checking account. Knowing how to maximize your benefits and how they each fit in with the rest of your circumstances is key to getting the most out of what the company offers. It’s important to understand that all aspects of your financial life are interconnected, and a decision made in one area, seemingly unrelated to another, may have unintended consequences.

That’s why it is important to seek the advice of a financial planning firm that has experience with your company benefits. Not every financial planning firm has proficiency in catering to the needs of corporate professionals.

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Still Don’t Feel Confident? We’ve Got You Covered.

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A masterclass designed exclusively for MetLife employees using the same strategies we’ve been using with MetLife employees for the last decade. Plus, a one-on-one coaching session with a Strata advisor to answer questions on your personal situation.

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Featured Articles

This represents the views and opinions of Strata Capital and has not been reviewed or endorsed by MetLife or any of its employees. MetLife is not affiliated with Strata Capital and has not endorsed or approved their services.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

401(k) Plan

You are likely most acquainted with the 401(k) plan, and it could very well be one of your most substantial assets by the time you retire. The MetLife 401(k) plan allows you to contribute a portion of your income to your retirement plan through payroll deductions, with the IRS dictating the varying contribution limits annually. MetLife offers three different contribution options.

Pre-tax Contributions. The most common type is pre-tax, or before-tax, contributions. When you make a pre-tax contribution, you are reducing your taxable income by that amount. While the money is invested in the plan, it continues to grow tax-deferred. This means that you do not pay taxes on any of the growth as the account grows. When you withdraw money from the plan, you will owe ordinary income tax on your distributions.

Roth 401(k) Contributions. MetLife offers a Roth 401(k) option. When you make a Roth contribution, the money you contribute is made with after-tax income, meaning your income is taxed and THEN it goes into the 401(k) plan. The money grows tax-deferred while it is invested. Distributions from the Roth 401(k) come out tax-free.

After-tax Contributions. Usually, these contributions are made after you’ve contributed the maximum allowable amount to the traditional or Roth accounts for the year. Contributions are made after you pay taxes, and the money grows tax-deferred while invested. When taking money out of the plan, the total amount of after-tax contributions you made will come out tax-free, however, any investment gains will be taxed as ordinary income, like pre-tax contributions. You may want to consider utilizing a backdoor Roth IRA strategy. Though this is an attractive strategy and seems simple, it is important to speak with a financial advisor or accountant before you attempt such a strategy. If done improperly, you could end up having some unintended tax consequences.

Understanding your entire financial situation and the tax impact each type of contribution has on your plan is the best way to determine which contribution or combination is right for you.

The best part of the 401(k) plan is that MetLife will match your contributions up to 4% of your eligible compensation. All you must do is contribute at least 5% of your income and they will automatically deposit funds each pay period.

The 401(k) plan offers many different investment options. For those of you who like to create your own portfolios, you can use different asset class funds to create your asset allocation. For those who do not want to do investment research, MetLife also offers target date funds. If you don’t have a lot of experience building your own portfolios, this could be a safe option for achieving a well-diversified portfolio.

401(k) Auxiliary Match Plan

You might notice this on your benefits statement and wonder, “Why there is another match plan?” MetLife created the auxiliary match plan so that it can equally match all employees. The IRS imposes a limit on the amount of compensation a company can “match” when contributing to a retirement plan on behalf of an employee. For those of you making over the IRS income limit ($330,000 for 2023), you will see that the company matches 4% on compensation over the limit go into this plan. This allows for the employee receiving the match to get a true 4% compensation match. Remember, you cannot contribute to this portion of your retirement plan. This is simply a match account for those making over $333,000 annually. Investment options for this plan are the same as the 401(k) plan.

Traditional Formula Pension

For those of you who have been with Met for a long time, you might have the traditional formula pension. Accumulation inside this pension was frozen as of December 2022, so now your benefits will accrue under the Personal Retirement Account (see next section).

Upon your separation or retirement from MetLife, you may commence the payment of your pension if you are retirement eligible. The pension is multiple payout options such as 100% single life payout, which would be largest monthly check, however, no payment would continue to your spouse if you passed away. It also offers a 100% joint payout, in which you would take a reduced benefit, but the monthly check would last until you and your spouse pass away. These aren’t the only two options. There are many other joint options that should be considered when you need to make this decision.

Choosing your payout option is probably one of the most important decisions you will make entering retirement, so it should be done diligently. Questions to ask yourself prior to making a decision are:

  • Am I married?
  • What other pensions do me and/or my spouse have?
  • What percentage of my total guaranteed retirement income is my MetLife pension?
  • What other sources am I using to recreate my household paycheck in retirement?
  • If something happens to me, what will pass along to my spouse?

Another strategy to consider is pension maximization. Also known as pension max, this technique aims to maximize retirement income by using life insurance to take the place of the survivor options. The concept involves choosing the single life option, which gives the maximum monthly benefit, and purchasing a life insurance contract on the person receiving the pension that will pay out to the survivor upon the pension owner’s death. There are a lot of moving parts to take into consideration when utilizing a pension max strategy, such as your age and ability to obtain life insurance and the cost. It is highly recommended you work with a financial planner to help properly analyze a strategy like this.

Personal Retirement Account (PRA)

The PRA is a cash balance pension plan. You might have been accumulating benefits in this account for a while, or you might have been recently enrolled, especially if you were accruing benefits through the traditional formula pension, which is now frozen.

There are two main components to the PRA: benefits credits and interest credits. The benefit credit, which is based on your eligible income, is the amount that MetLife is going to contribute to this account on your behalf. MetLife will credit your account:

  • 5% of compensation up to the Social Security Wage Base
  • 10% of compensation above the wage base but below the IRS income limit

The interest credit is how the benefit grows while money is in the plan. Unlike the 401(k), you don’t select investments in this plan. Instead, your account is credited with interest which is calculated based on the 30-year U.S. Treasury Securities rate published by the IRS monthly. This rate is subject to annual adjustments.

The most significant decision you'll face regarding the PRA is determining what to do with it when you leave MetLife. You have four options:

  1. Lump-sum cash payment
  2. Rollover your PRA balance into an IRA or other retirement plan
  3. Convert your PRA balance into a monthly annuity payout
  4. Leave your balance in the PRA to accrue interest credits. You can do this until age 65, at that point you will have to choose option 1, 2, or 3.

Selecting the most suitable option depends on your individual circumstances and preferences. Factors to consider are:

  • Your age and health at retirement
  • Marital status at retirement
  • Sources of guaranteed income in retirement (pensions, SSI, etc.)
  • Alternative investment options, if considering an IRA rollover
  • The need for additional guaranteed income
  • If departing MetLife before retirement, the better choice between maintaining balance in PRA or investing elsewhere

We consider all variables of your financial life when helping you make this decision. For example, the rollover option might be suitable for someone who has other assets, stock options to vest or exercise, receives another pension, or plans to continue working. They may not necessarily need the income right away and choosing to roll over the balance to an IRA can allow for further deferral of taxes and align the account with the rest of their financial plan. On the other hand, someone may elect an annuity option if they do not have other pension-like retirement sources in retirement. The assurance of a guaranteed monthly check can provide confidence in retirement.

Remember, decisions like this should never be done in a vacuum. It is important to align your PRA with your other investments to effectively maximize its value.

Auxiliary Retirement Plan (Aux Plan)

Participation in the aux plan comes into play only when your eligible compensation is above the IRS income limit ($330,000 for 2023). There are two different formulas for how your benefit accrues and distributes: the traditional pension formula and the PRA formula. Since accruals on the traditional pension formula have ceased, everyone’s benefit will now accrue under the PRA formula.

Here’s how it works: Essentially, MetLife will credit 10% of your eligible income ABOVE the IRS income limit to your Auxiliary Retirement Plan. Interest credits work the same as the PRA.

Like your other benefits, understanding how the aux plan works when you leave MetLife is crucial. Distribution methods depend on how your benefit was accrued, be it the traditional pension formula or the PRA formula. Keep in mind, it is possible for your aux plan balance to have been accrued under both formulas.

Under the traditional pension formula you will receive your benefit as a monthly annuity payment. There are several payout options, similar to the traditional pension.

Under the PRA formula you will receive your payment as a lump sum and it will occur at your separation from MetLife.

Remember, both distribution methods are taxable as ordinary income. It is important to understand how you will be receiving your benefit and to properly account for each payment when going through your retirement income planning.

Deferred Compensation

For those that are eligible, MetLife offers a deferred compensation plan. The plan permits you to defer a percentage of your income today to be paid out in the future. You have the option to choose how you receive this payment – lump sum, 5-year installments, etc. This can be a powerful tool to save for financial goals, such as college funds, or to reduce current income in the year you defer. It can also cause headaches if not executed properly. The most common error we see when it comes to deferred comp is employees choosing to defer income without a solid cash flow plan in place. This can cause scattered payouts and elections – some are lump sum, some are over a 5-year period, some may occur while you are still working, or the income may not even be necessary!

Developing a cash flow strategy is key to taking full advantage of your deferred compensation. For example, you may want to retire early at 60 before your pension kicks in at 65. It could make sense to defer compensation to create income to bridge the gap between 60 and 65. Or you may want to use your benefit to for a financial goal, such as paying for college. Electing a lump sum in the same year you need to begin paying for a child’s college tuition would make a lot of sense.

An often overlooked component of the deferred comp is the immediate income reduction in the deferral year A common strategy we use aligns deferrals with the vesting of stock options or RSUs. For example, if you anticipate $100,000 of RSUs vesting this year, it might be prudent to defer an equivalent amount of income to offset the additional income from the RSU vesting.

MetLife offers many different investment options within the deferred comp plan and it is advisable to align the investment allocation with your overall investment plan.

Stock and Equity Compensation

MetLife offers different types of stock compensation such as restricted stock units (RSUs), stock options, and performance shares. Using the stock that you receive to pay down debt, pay for children’s college or to save for retirement is very common and can be a good choice.

When it comes to vesting or exercising on your equity compensation, it is almost always advisable to do some tax planning. For example, stock is automatically sold to cover a portion of taxes but depending on your tax bracket, it may not be enough to cover the entire tax liability. Given that you can anticipate an estimated dollar amount from RSUs vesting during the year, you have the capability to assess its impact on your tax situation and potentially implement strategies to reduce the impact. This also applies when choosing to exercise any stock options; it’s important to know the tax impact prior to executing.

Conducting cash flow planning before exercising or vesting is key to maximizing this benefit. Avoid succumbing to the “groupthink” that may arise when others in the office are exercising their stock options. For instance, if you know you need MET stock to hit $50 for early retirement, let that be your trigger to exercise, not because Jim from group benefit sales told you to do so. Understanding your vesting schedule for RSUs is important, especially after you separate from MetLife. You may have 3 years of vesting RSUs after you retire. This stock could be used to supplement your retirement income and should be coordinated with your retirement income plan.

Another common question we get from employees is, “How much of my net worth should be in MET stock?” There is nothing wrong with holding MetLife stock; however, there are risks. You already rely on the company for many parts of your life such as income, health insurance, and various other benefits. Owning a sizeable amount of the company stock as well puts a lot of your eggs in one basket.

Diversifying can be easy when there are no substantial gains in the stock. But what about situations where significant gains are involved? If your MET stock has large unrealized capital gains, this can make the situation difficult to unwind because now you will lose money to taxes if you were to diversify in a lump sum. The best strategy usually is to diversify over time and tax-loss harvest where possible to unwind the position. This becomes more important as you approach retirement or any other goal you would use the MET stock to fund.

Health Insurance after MetLife

The age at which you choose to retire may present you with various healthcare options to consider, especially if you are retiring “early” and have a spouse or children who still depend on you for health insurance coverage.

Retiring before age 65
If you choose to retire before 65, you'll need to find healthcare coverage to bridge you to 65 when Medicare eligibility begins.

These are the options:
You can utilize the MetLife post-employment benefits if you qualify (MLC)
Remember to ask Benefits about whether you’ve accrued any credits
You can continue your coverage for up to 18 months through COBRA (MLO)
You can purchase private health insurance coverage on your own through the marketplace
You can utilize a spouse’s plan if they are still working.
The best option for you depends on your personal circumstances. Considerations should include your established budget for your healthcare as well as your health status.

For more detailed information and explanations, please watch the healthcare section of our masterclass.

Retirement at 65 or later
For those who are retiring at 65 or older, you can enroll in Medicare, but you’ll still need to make some choices about your supplement and what level of coverage you would feel comfortable with.
You can utilize MetLife MLC option for Medicare
You can search for your own Medicare Supplement
Remember, when it comes to Medicare supplements you can go Rolls Royce or Honda Civic. It all depends on your health status, your budget, and what you are comfortable with.

Other Benefits
MetLife offers a slew of other benefits such as group life insurance, disability insurance, long-term care, legal plans, and much more. Each benefit should be evaluated through the context of your plan to truly maximize your benefits. For example, you may need to continue life insurance coverage in retirement but feel like it may be expensive to purchase at this age. The group coverage through MetLife can be converted to an individual policy and may be more cost-effective than purchasing a new policy. It is important to look at each benefit offered to you and determine if you can retain the benefit after retirement, or if it even makes sense to do so.

A valuable tip we often share with individuals enrolled in the legal plan before they retire is to make sure they use the plan to consult with an attorney for their will, durable power of attorney, and healthcare proxy. Many of our clients will wrap up their legal work through the plan prior to leaving the company. This yields them a significant cost savings. Might as well use the benefit if you’ve been paying for it!

401(k) Auxiliary Match Plan

You might notice this on your benefits statement and wonder, “Why there is another match plan?” MetLife created the auxiliary match plan so that it can equally match all employees. The IRS imposes a limit on the amount of compensation a company can “match” when contributing to a retirement plan on behalf of an employee. For those of you making over the IRS income limit ($330,000 for 2023), you will see that the company matches 4% on compensation over the limit go into this plan. This allows for the employee receiving the match to get a true 4% compensation match. Remember, you cannot contribute to this portion of your retirement plan. This is simply a match account for those making over $333,000 annually. Investment options for this plan are the same as the 401(k) plan.