As a fee-based financial planning firm in New Jersey that offers fiduciary services, Legacy Wealth Advisors helps current and retired Merck & Co. employees make important financial decisions as they plan for retirement. If you want a new outlook on your retirement plan or have questions about anything you read here, we invite you to schedule a complimentary meeting with us.

Merck & Co. has been part of the healthcare industry for many years and is based in Rahway, New Jersey. Since its founding in 1891, Merck has become a global health care company that develops medicines and vaccines.

Merck provides U.S. employees with a pension plan and a 401(k) savings plan that includes company matching. The pension is available to eligible employees, while the 401(k) helps employees save for retirement and offers tax advantages.

As employees get closer to retirement, it is important to fully understand how these benefits work together. Each person’s situation is different, so Merck employees should think about how to manage their 401(k), review their pension, and coordinate these benefits with Social Security and other retirement income.

Here are some common steps people look at when getting ready for retirement. The right strategies for you will depend on your own situation, financial goals, and how much risk you are comfortable with.

Many Merck & Co. employees nearing retirement have built up savings in the Merck US Savings Plan, which is a 401(k) offered through the company. Merck’s U.S. benefits include a 401(k) plan with matching contributions from the company.

As you get closer to retirement, it’s a good idea to see how your 401(k) fits into your overall financial plan. You might want to look at your investment options, tax considerations, and how you plan to use your account for retirement income. For more information about the Merck US Savings Plan, you can find a third-party summary with plan details here:

• PlanIQ overview of the Merck & Co. 401(k) Savings Plan

When you retire or leave Merck, you may have several options for managing your 401(k) savings, depending on the plan's provisions and your circumstances. You can keep your money in the company plan, move it to an IRA or another retirement account, or take distributions.

Instead of looking at your 401(k) choices on your own, think about how each option works with your pension, other retirement savings, income needs, and your full financial plan.

Knowing how your employer contributions work can help you make more informed decisions about your retirement benefits. With Merck's U.S. Savings Plan, the company matches 75% of the first 6% of your total pay that you contribute each pay period, up to plan and IRS limits. You are always fully vested in your Savings Plan account at Merck.

Since Merck's Savings Plan gives you full ownership of your account right away, you do not have to stay with the company for a certain number of years to keep the employer matching contributions. This may be relevant when you are planning your retirement and thinking about how your 401(k) works with your pension and other retirement income.

To get the latest information about your benefits, check the plan's employer matching contributions and vesting provisions at MyPlanIQ's MSD Employee Savings & Security Plan analysis. Your benefits may differ depending on your situation, and the official plan documents will have the final say.

A 401(k) plan generally offers participants a selection of investment options based on your own risk comfort, how long you have until retirement, and your goals. As you get closer to retiring from Merck & Co., consider reviewing the following:

• The investment choices your plan offers
• How well your portfolio is spread out across different types of investments
• Whether the amount of risk you’re taking matches your retirement timeline and expected income needs

It’s best to make investment decisions as part of a long-term financial plan, not just in response to short-term market changes. Checking your investment strategy from time to time can help you see if it still fits your goals as you near retirement.

Along with the 401(k) plan, eligible Merck & Co. employees might also receive benefits from the company’s defined benefit pension plan. While a defined contribution plan builds up an individual account, a defined benefit pension usually pays a retirement benefit based on your pay and how long you have worked for the company.

Publicly available plan listings, such as QDRO Desk’s overview of the Merck pension plan, can provide additional information about the plan. Still, your own benefits and eligibility depend on the official plan documents.

As you get closer to retirement, make sure you understand the pension benefit you have earned and how it fits into your financial plans. Be sure to consider:

• If you meet the plan’s rules for eligibility and vesting
• What your normal retirement age is and if you qualify for early retirement options
• When you want to start receiving your pension payments
• How your pension income will work together with your 401(k), Social Security, and any other retirement income you have

Pension benefits can be complicated and are different for everyone. Look over your benefit statement and the official plan documents, and talk to your plan administrator to make sure you understand your options before you make decisions about retirement.

Social Security benefits can be an important part of retirement income. The timing of when you claim these benefits can change how much you receive each month, so you should think carefully about when to start.

The Social Security Administration’s retirement benefits page has calculators and resources to help you estimate your benefits and learn about your options for claiming them.

If you work at Merck & Co. and are getting close to retirement, it helps to look at Social Security along with your pension, 401(k), and other income sources. Reviewing all of these together can help you build a retirement plan that fits your goals and needs.

Retirement income can be taxed at the federal, state, and sometimes local level. Money you take from traditional 401(k) plans and pension benefits is usually taxed as regular income, but the exact tax rules depend on the type of account and whether you made after-tax contributions.

The IRS retirement plans resource center offers details about how retirement accounts are taxed, required minimum distributions, and other rules that could affect your retirement income.

Thinking about taxes is especially important when you decide how and when to take money from your retirement accounts. Looking at the possible tax effects as part of your overall financial plan and working with a qualified tax professional if needed can help you make more informed decisions about your retirement income. 

Retirement is a good time to look over your estate planning documents and check who you have listed as beneficiaries on your retirement accounts. If your job, finances, or family situation has changed, you might need to make some updates.

It’s a good idea to talk to a qualified estate planning attorney for legal advice and help with preparing your documents.

Retirement is a major financial change, and Merck & Co. employees may have several decisions to make as they prepare for this new phase. You might want a fresh perspective on your retirement plan, especially if you have questions about how your benefits and income sources work together. Here are some key areas to consider:

• 401(k) distribution or rollover choices and how they might affect your taxes
• Understanding your pension income choices and when to start receiving them
• Bringing together your pension, 401(k), Social Security, and other sources of retirement income
• Planning for a longer life, healthcare expenses, and changing financial needs

Getting a new perspective can help you better understand your options and how different decisions may affect your overall retirement plan.

If you work at Merck & Co. and want a new look at your retirement planning, we invite you to schedule a complimentary meeting with our team. We can answer your questions and help you see how your retirement benefits and other financial resources fit into your plan.