Investing in your future

Learn about how two Rockwell Collins employees are taking responsibility for their future via the company's savings plan.

By Anne Wiskerchen

Linda Engen dreams about the day she and her husband can vacation at a beach cottage of their own on the central coast of California and enjoy their retirement.

Like many Baby Boomers who are nearing retirement, she's also concerned about having enough money for her future, which is why she is planning ahead.

Yifei Wang has the same concerns. So, this 25-year-old Rockwell Collins systems engineer is already taking responsibility for her future and is participating in our company's savings plan.

Whether your dreams are about traveling the world, spending afternoons in the garden or on the golf course, we are each responsible today for making our retirement dreams a reality.

"Many companies are moving away from defined benefit plans and shifting more responsibility to employees," said Engen, manager of Payroll Operations, Benefits Insurance Administration, HRIS and Lean at Rockwell Collins in Cypress, Calif. "To achieve my dream, I need to use all the resources available to me."

Changing times

A 25-year company veteran, Engen began participating in our company's pension and 401(k) plans from the start. But what worked in 1981 is no longer an option.

"Contributions to the savings plan are automatically deducted from your paycheck, making it an easy way to save; and the company match is like free money," said Engen. "But times are changing, so it's crucial that we each take an active role in planning for our future."

The shift in responsibility was reinforced when Rockwell Collins announced the freeze of the pension plan effective Sept. 30, 2006. In its place, all eligible U.S. Rockwell Collins employees began receiving a retirement contribution to their savings plan account in October 2006. This deposit is in addition to employee contributions and any company match.

Employees also can purchase Rockwell Collins stock at a discounted rate through the employee stock purchase plan.

Engen recently elected to make additional catch-up contributions to her 401(k) to ensure she was on track to meet her financial goals. This catch-up contribution allows employees age 50 and older — or those who will turn 50 in 2007 — to save up to an extra $5,000 per year on a pre-tax basis. That amount is in addition to the maximum pre-tax contribution of $15,500 that all employees may make each year.

Although Engen still has several years before she plans to retire, she understands how important it is to start earnestly planning today.

"I also hired a financial planner to help me evaluate my plan every quarter," she said. "He has helped me move some of my assets from high risk investments to more conservative ones."

Investing early

For Wang, retirement planning is just beginning. More than a year ago, she entered the working world knowing it was up to her to save for her future. She also understood the need to start saving now and enrolled immediately in the plan.

"Since I'm further from retirement, I can be more aggressive in my investment decisions," said Wang.

Although she has already started her financial planning, she recognizes the difficulties many young people face when deciding how much to save and when to start planning for retirement.

"Coming out of college you hear it is important to start saving, which can be tough for young people with student loans and credit card bills," said Wang. "It's overwhelming at first. We are at an age where we tend not to plan more than a few days ahead, so it's hard to get us to sit down and plan for a retirement that seems so far away."

To help employees save for their future, Rockwell Collins automatically enrolls new hires in our retirement savings plan at a pre-tax deduction of 2 percent of base pay. However, any time before your automatic enrollment date, you have the option to cancel your enrollment from the plan or change your contribution amount.

Additional enhancements to the "My Long Term Security" component of Flexible Benefit Choices are expected to be introduced in fiscal year 2008. These additions will help you address life's challenges through a wide range of resources and services.

Wang also is aware of tools and classes offered online to help investors make the right choices, and she enjoys testing those ideas with people close to her.

"I use the Fidelity Web site for information, planning and making changes to my account," she said. "But I also ask some of my mentors what they suggest for investing or approaches they have used."

Putting it all together

Engen continues to look toward her future, and is working hard to reach her retirement goal. And while she is satisfied with the steps she has taken along the way, she also has one piece of advice for others whether they're at the beginning or end of the retirement planning efforts — get involved.

"We are all busy and we all use the excuse that we don't have time to attend to our finances," she said. "But you really need to get involved because it's so important and has a big impact on your future."

Wang couldn't agree more. "Young people are ambitious and want to be millionaires," she said. "But we have to remember it's important to have a back-up plan just in case that doesn't work out."

Photo credits:
Linda Engen (left) by Laurel Hungerford.
Yifei Wang by Paul Marlow.