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A Guide to Benefits When Changing Jobs

If you’re changing jobs, you probably have a lot on your mind. As you wrap up work with your previous employer and prepare for your new role, it can be easy to let important benefits-related decisions fall by the wayside. If that happens, you could miss a limited opportunity to sign up for new benefits or miss out on making wise changes to your plans. To stay on track financially during a career transition, be sure to review the status of your retirement accounts and other valuable employee benefits.

Qualified Retirement Plans

Many employers offer qualified retirement plans, such as 401(k) and 403(b) accounts. (“Qualified” means that these plans qualify for tax advantages per IRS rules.) When transitioning to a new job, you’re entitled to keep the vested balance in your qualified retirement plan, including contributions and earnings. You’re also entitled to keep any employer contributions that have vested according to your employer’s schedule.

What can you do with the money? You have several options:

  • Leave the funds in your current employer’s plan if your vested balance exceeds $5,000. If the balance is less than $5,000, the plan could require that you roll over or distribute your assets.
  • Roll over the funds to an individual IRA or, if allowed, to your new employer’s plan.
  • Withdraw the funds and pay any taxes due along with any applicable penalties. (It’s wise to carefully consider any decision to withdraw and spend your retirement savings.)

Accumulation rights. If you wish to roll over the funds, consider the accumulation rights you may be giving up by switching to a different plan. Accumulation rights offer shareholders the potential for reduced commissions when purchasing additional fund shares. If you have such rights with your current plan, they could become important if you plan to purchase a sizable amount of shares.

Potential penalties and fees. It’s also important to consider the possibility of premature distribution penalties, as well as any fees and expenses a new plan may impose. If you’ve separated from service in the year you turn 55, or at any later age, any assets distributed from your old employer’s plan aren’t subject to the standard 10 percent penalty. Once funds are rolled into an IRA or a new plan, however, the 10 percent penalty may apply to subsequent distributions if you’re younger than 59½ at the time, unless you can claim an exception.

Rolling funds over to an IRA. Factors to consider before taking this action include:

Advantages

  • IRAs may provide more investment choices than employer plans.
  • IRA assets can be allocated to different IRAs. There is no limit on how many direct transfers you can make from one of your IRAs to another IRA in a year. This means you can easily move money between IRAs if you’re dissatisfied with an account’s performance or administration.
  • Although 401(k) distribution options depend on the plan terms, IRAs offer more flexibility.
  • IRAs have more premature penalty exceptions than 401(k) plans.

Disadvantages

  • When you turn 72, you must start taking required minimum distributions (RMDs) from pretax IRAs, whereas you may be able to defer them in a 401(k) until the year you retire if your employer allows for it. (There are no RMDs from Roth IRAs during the account owner’s lifetime.)
  • IRA account expenses, such as trading charges or annual fees, may be higher than qualified retirement plans.
  • When you roll funds over from a 401(k) to a Roth IRA, taxes will need to be paid on the pretax contributions; however, any future distributions from the Roth IRA may be tax free if IRS requirements are met.

Rolling funds over to your new employer’s plan. Employer plans offer the following advantages:

  • If you intend to work beyond age 72, participation in the employer’s qualified plan means you can typically delay the first RMD until the year you retire if the plan allows. (An exception applies if you own 5 percent or more of the business offering the plan.)
  • Employer 401(k) plans may receive greater creditor protection than IRAs. Typically, employer plan funds cannot be used to satisfy most creditors, while the federal protection for IRA funds is more limited.

Stock Options and Nonqualified Deferred Compensation Plans

Prepare a list of any stock options you’ve received from your employer. Often, vested options expire within a specified time frame when you leave a job. Deciding whether to exercise your options depends on your financial situation and whether your options are “in the money” (i.e., the exercise price is lower than the market value).

Nonqualified deferred compensation plans allow executives to defer a portion of their compensation and the associated taxes until the deferred income is paid. With these plans, leaving your employment may trigger the need to take distributions in lump-sum or installment payments. You should be aware that any distributions will affect your taxable income.

Life Insurance and Disability Insurance

Employer-provided life insurance remains active only while you are employed. Ask if you have the option to convert the policy to an individual policy offered by the same insurance provider. If you do switch to an individual policy, however, the premium will likely increase. In some cases, it may be time to evaluate policy options from other companies. If you’re in between jobs, for instance, you may want to consider an individual policy that won’t be affected by employment changes.

Health Insurance

Your health insurance will expire once you leave an employer. COBRA may be a good option if you need interim health insurance coverage. Keep in mind, however, that your premium payments will increase when you opt for COBRA coverage. Shopping for an individual health insurance policy that meets your needs could reduce your premiums.

New Benefits Review

Once you start your new job, take time to understand the new benefit options, including health insurance, disability insurance, and employer savings plans. It’s important to review how the new employer retirement plan options fit into your overall savings plan, including any employer matches. Remember to fill out beneficiary designations for insurance policies and saving plans—and review those designations periodically. Finally, if your salary has changed, it’s a good time to determine whether you should adjust your tax withholding and investment elections.

 This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer. 

 If you are considering rolling over money from an employer-sponsored plan, such as a 401(k) or 403(b), you may have the option of leaving the money in your current employer-sponsored plan or moving it into a new employer-sponsored plan. Benefits of leaving money in an employer-sponsored plan may include access to lower-cost institutional class shares; access to investment planning tools and other educational materials; the potential for penalty-free withdrawals starting at age 55; broader protection from creditors and legal judgments; and the ability to postpone required minimum distributions beyond age 72, under certain circumstances. If your employer-sponsored plan account holds significantly appreciated employer stock, you should carefully consider the negative tax implications of transferring the stock to an IRA against the risk of being overly concentrated in employer stock. Your financial advisor may earn commissions or advisory fees as a result of a rollover that may not otherwise be earned if you leave your plan assets in your old or a new employer-sponsored plan and there may be account transfer, opening, and/or closing fees associated with a rollover. This list of considerations is not exhaustive. Your decision whether or not to roll over your assets from an employer-sponsored plan into an IRA should be discussed with your financial advisor and your tax professional.

© 2022 Commonwealth Financial Network®

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To Our Customers and Community

Updated March 7, 2022 

Masks are no longer required to visit our offices.

The safety and good health of our clients, employee-owners and our community continue to be our top priority.

We know that comfort levels will vary and regardless of our individual vaccination status we are happy to wear a mask when meeting with you if you prefer.

We are happy to meet with you in person, talk by phone or set up a Zoom. Our office hours are 8 a.m. to 4:30 p.m., Monday through Friday.  We look forward to seeing you soon!

We will update this page as needed.

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Knitting for a Cause – Program Continues in 2022

woman at table with knitted items
Kimberly Edgar of Allen Insurance and Financial poses with some of the hats and yarn donated through the company’s Chemo Caps for Kids program. Donations of yard and knitting time are always welcome.

Allen Insurance and Financial is pleased to announce its continued support for the Chemo Caps for Kids initiative sponsored by Commonwealth Cares Fund Inc., the 501(c)(3) charity founded by Allen’s Registered Investment Adviser–broker/dealer, Commonwealth Financial Network®. Chemo Caps for Kids provides hand-knit and crocheted hats to children undergoing cancer treatment.

Allen Insurance and Financial participates in the creation of these caps and invites the community to join the effort. Kimberly Edgar of Allen’s Camden office is coordinating the program locally.

Many of the Midcoast knitters who have helped have remained anonymous, so we can’t thank them publicly, said Edgar. But we can reach out to the knitting community, always so generous, and let them know we’d love their continued support. “

Anyone interested in donating yarn or knitting time to this project can call Kimberly Edgar at 236-4311. Allen Insurance and Financial has been involved in this program since 2014.

The Chemo Caps for Kids program has sent more than 10,000 caps to children’s hospitals across the U.S., with knitters in Maine and across the country using their talents to help kids who are in treatment. Some of hats from Maine have been distributed to hospitals in New England as well as to places such as Phoenix Children’s Hospital and the Ann & Robert H. Lurie Children’s Hospital of Chicago.

ABOUT COMMONWEALTH CARES
Commonwealth Cares provides contributions of time, talent, and financial support to a wide range of philanthropic efforts aimed at relieving human suffering, promoting social and economic growth, and sustaining and protecting our planet’s resources. All operating and administrative expenses for Commonwealth Cares are borne by Commonwealth. One hundred percent of every dollar contributed goes directly to those in need.

ABOUT ALLEN INSURANCE AND FINANCIAL
Serving clients in Midcoast Maine and around the world since 1866, Allen Insurance and Financial is an employee-owned insurance, employee benefits, and financial services company with offices in Rockland, Camden, Belfast, Southwest Harbor and Waterville. Call 800-439-4311. Online: AllenIF.com and on Facebook.

Allen Insurance  and Financial, 31 Chestnut St., Camden, 04843. 207-236-8376. Securities and Advisory Services offered through Commonwealth Financial Network®, Member FINRA, a Registered Investment Adviser. Fixed Insurance products and services are separate and not offered through Commonwealth Financial Network®.

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AIO’s Second Annual FILL THE STRAND Event, Keeping Neighbors Fed and Warm

On Monday, January 17, 2022 AIO Food and Energy Assistance will host its second FILL THE STRAND food and funds drive to benefit AIO’s Food Assistance, Energy Assistance, Weekend Meal, and Diaper Assistance Programs. This event challenges the community to fill every seat in the historic theater with bags of food and funds for AIO’s programs.

The 2021 Fill the Strand event raised more than $27,000 in support for AIO, filling the theater seats nearly 3 times. The goal for the second event is to raise $30,000. AIO is grateful to its partners and sponsors the Strand Theatre, Allen Insurance and Financial, First National Bank and First National Wealth Management, Rockport Steel and Fletcher and Michael McNaboe of City + Harbor Real Estate Group for their support of the event.

Coordinators would like to encourage community organizations, businesses, and residents to do food and fund drives within their groups, workplaces, and neighborhoods to help with the drive. The food and funds collected will go directly to AIO’s programs that support Knox County families. Any individuals or groups interested in holding a food drive within their group is asked to contact one of the coordinators listed below for details.

Monetary donations are welcome – and in fact your dollar goes further since AIO can purchase food through partners at a competitive price. Individuals can sponsor a bag at $25, which will fill one seat in the theater. Those interested in sponsoring a bag through a financial donation can make it online at www.aiofoodpantry.org/strand.

Non-perishable food with a current expiration date is appreciated (no glass please). AIO would be grateful for donations of the most needed items including: ready rice pouches, macaroni and cheese and pasta; cereal & oatmeal; pop-top canned foods and Chef Boyardee meals; single serving lunch items; kid-friendly snacks; 100% juice boxes; shelf stable milk; snacks (granola bars, peanut butter crackers, 6-pack raisins). Whether a monetary gift or food donation – your support will help the people in our community who need it the most.

“At the Strand, we’re thrilled to partner with AIO again in this creative effort! We believe in supporting the good work of other organizations throughout our community, and nothing is more important than helping to make services available to anyone in Knox County with a need for food and heat — especially in these extra-challenging times,” shares Jessie Davis, Executive Director of Friends of the Strand Theatre.

“We are thrilled to continue our partnership with AIO and the Strand Theatre on this unique project. Together, we can make a real difference in the lives of our friends and neighbors,” said Mike Pierce, president of Allen Insurance and Financial.

“First National Bank is proud to support AIO’s Fill The Strand Event,” said Tony McKim, president and CEO. “We are grateful for the critical services AIO provides our neighbors in need in Knox County.”

The impact of this event is significant. “Last year’s event provided a tremendous amount of food when we needed it the most” said AIO executive director Joe Ryan. “Facing an even more challenging winter this year, we expect the needs within the community to be even greater. The Fill The Strand Event will provide much needed relief at exactly the right time.”

Food collection sites have been established at area businesses, including Allen Insurance & Financial offices (Rockland and Camden), The Strand Theater, First National Bank (Rockland branches), and AIO Food and Energy Assistance (Rockland). On January 17th volunteers will be at the Strand Theatre between 9:00-2:00pm to receive food and funds donations. For more information about the event and how you can participate please contact event coordinator Leila Murphy, email hidden; JavaScript is required. Event information can be found at www.aiofoodpantry.org/strand.

About AIO Food and Energy Assistance: For over 30 years AIO has provided critical food and heating assistance to Knox County families. Funding for AIO’s programs is needed more than ever as food insecurity in Knox County is projected to increase 46% overall. Knox County ranks among the highest food insecurity rate in the state. Child food insecurity is projected to reach 28% (a 52% increase). In 2021, AIO has supported 1547 individual households and has distributes nearly 400 meal kits each week during the school year. AIO’s Energy Assistance Program helps households with heating assistance or electrical disconnection prevention – which is critical as winter begins. Last winter AIO distributed 450 energy assistance vouchers, totaling $108,000 in support. The need for assistance is real and is not going away anytime soon given the ongoing pandemic.

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Donation to Pacific Engine Company

Dan Bookham and Jason Peasley of Rockport Fire Department
Dan Bookham of Allen Insurance and Financial presents a donation to Rockport Fire Chief Jason Peasley for use by the Rockport, Rockland and Camden fire departments to promote and offer free home fire inspections, smoke detectors and other help to residents of the three communities.

Allen Insurance and Financial recently delivered a donation to the Rockport, Camden and Rockland fire departments for their home inspection and smoke detector program.

“We’re in the business of helping people in our community protect their homes and their families – and so support for a program such as this, with its emphasis on health and safety, is very important to all of us at Allen,” said Dan Bookham, vice president at Allen Insurance and Financial. “This three-department cooperative effort is a project with an immediate impact and can continue to make a real difference.”

The donation is the result of a partnership between Allen Insurance and Financial and the community outreach program at MMG Insurance, the Presque Isle-based insurance carrier.

Chief Jason Peasley of the Rockport Fire Department says the program is ongoing, and donations will be accepted by any of the three departments at any time. He said that since the spring, 22 homes in the area have been inspected and fitted with smoke detectors – but that the need for this work continues.

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Trail Clearing With Georges River Land Trust at Weskeag Headlands Preserve

Holly and Jim Coombs, Daulton Wickenden, Weskeag River Preserve, trail clearing

Holly and Jim Coombs and  Daulton Wickenden help with trail clearing at the Weskeag River Preserve.

Last week some of our employee-owners joined Georges River Land Trust’s trail clearing efforts at the Weskeag Headlands Preserve in South Thomaston, one of the land trust’s newest properties.

The weather was perfect on Wednesday, May 19 for some quality time in the Maine outdoors. Some of the cutting, sawing and plant-pulling was strenuous work – but that’s what it takes to get a trail ready for its public debut. (We brought plenty of water and bug spray with us!)

Special thanks to GRLT Trail Coordinator Matt Bonner for his leadership and instruction. The GRLT website has all the info you need to learn about all their trails and preserves so you can plan your own outing − or get in touch to help with trail maintenance.

https://www.georgesriver.org/

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Fill the Strand Success!

From AIO Food and Energy Assistance
Rockland, Maine

On Monday, January 18, 2021 AIO Food and Energy Assistance hosted its first FILL THE STRAND food and funds drive to benefit AIO’s Food Assistance, Energy Assistance and Weekend Meal Programs. The day was significant as a national day of service, honoring Martin Luther King Jr. The goal was to fill every seat in the theater with a bag of food or funds for food; with the overwhelming support from the community AIO was able to fill the theater three times!

See photos from the event. 

The event was a wonderful collaboration with the Strand Theatre and Allen Insurance and Financial, which provided an opportunity for the community to connect and participate, in a meaningful, but safe way. The Strand Theatre had the door open and the lights turned on for one of only a few times in the last ten months. “While the pandemic has temporarily closed the doors to the theater, the work of the Strand carries on in new and creative ways–and this effort was no exception,” shares Jessie Davis, Executive Director of the Strand. “As a community mainstay, it made absolute sense for the Strand to partner with other deeply-rooted community institutions, AIO & Allen Insurance and Financial, to provide an extra lift to our friends and neighbors in these difficult times!”

Allen Insurance and Financial employees were on hand to help greet, collect, and sort incoming food donations. The goal The generosity of the community has been remarkable- with more than 2000 pounds of food collected, sorted and integrated into AIO’s market by the end of the day. More than $27,000 in financial donations were raised, which together with the food collected will go directly to AIO’s programs that support Knox County families. All together more than 245 people or organizations contributed to Fill the Strand’s success.

Liz Jenkins, AIO Board President shares, “We are amazed by the day and the show of support from all corners of the community, especially our partners. I think that we have all been craving an opportunity to “do” something, something meaningful and joyful outside of our own walls, during a year when we’ve been at home so much. Leila Murphy brought this idea to me a year ago, and while we had to pause plans last spring, when Wendy Bryd from Allen Insurance and Financial contacted me in the late fall about a team project, the stars aligned. Our AIO Weekend Meal program manager, Molly O’Rourke, is a professional events planner so she rounded out our planning team beautifully.

I’m grateful to Leila and Molly for coordinating the event, and to everyone who supported the event-whether donor, volunteer or cheerleader. Thank you. The good energy and the excitement around the event was infectious. We certainly hope to do it again!”

“We’re grateful we could play a part in a very special day − one that showed our community at its best,” said Mike Pierce, president of Allen Insurance and Financial. Allen Insurance and Financial, was a collection site in the weeks leading up to the event, in addition to having a team of volunteers on the day of the event. Main Street Market also served as a collection site.

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A Day of Service in the Community: Doing Things That Need to be Done

Allen Insurance and Financial encouraged employees to use a paid community service day on Jan. 18  Amy Bowen and Sally Miles, members of the business insurance team in our Belfast office, put in some real elbow grease, volunteering for Waldo Community Action Partners in Belfast, assembling 20 conference room chairs and deep cleaning two of the organization’s transport vans.  Says Sally: “It was a great day – we did things that needed to be done!”

AMy Bowen and Sally Miles volunteer at WaldoCAP
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MLK Day Food and Funds Drive an Incredible Demonstration of Community Spirit!

promotional image for Jan. 18 food drive in Rockland, Maine

How do you find the words to describe an event where teamwork, generosity and community all come together to exceed a goal three times over? That’s what happened on Monday, Jan. 18, when a group of Allen employee-owners from our Camden and Rockland offices joined AIO Food and Energy Assistance’s team of volunteers at The Strand Theatre in Rockland, which hosted the event. Together we assisted in collecting food and funds in support of AIO’s Food Assistance, Energy Assistance and Weekend Meal programs.

In all, 2,219 pounds of food and $24,502 were collected. AIO’s original goal of filling the seats in the Strand was exceeded by three times, with a total of 1,128 seats filled – each with a bag of food.  (And the original funds goal of $10,000 was shattered, too!)

It was a day of community, connection and joy and a great way to celebrate Martin Luther King Day in Rockland.

We’re truly grateful for

  • All who donated food and funds.
  • Our fellow volunteers from AIO and The Strand.
  • AIO for stellar event organization and for the opportunity to participate in this special event.
  • The Strand for a warm, welcoming venue.
  • Main Street Markets in Rockland, for being a food collection site and rolling a huge cart of donations down Main Street from the market to the Strand.
  • Photographers Tara Rice, Leila Murphy and Dan Bookham for these photos we can share with you.

... A time-lapse video of the work it took to fill the Strand Theatre ...

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Supporting a Waldo County YMCA Food Drive

When the call came in  from the Waldo County YMCA in December 2020 about a food drive to help fill food pantries at schools in the county, our six-member Belfast office team leapt into action and as of Friday, Jan. 15, together had raised a total of $825 in cash donations, which includes donations from the entire office as well as additional contributions from a number of fellow employee-owners and a partial company  match in the form of Hannaford gift cards.

Shown here are, from left, are Libby Davis, Amy Bowen and Joella Rossignol, with just some of the groceries Amy was able to buy with those funds.

Libby Davis, Amy Bowen, Joella Rossignol