There are many different moving parts to AT&T’s employee benefits. After 30+ years working AT&T employees and retirees, we know that it can be challenging to keep track of all your options. A good example is AT&T’s employee stock purchase and cash deferral plans.
These plans are available to AT&T employees who are third level or higher, and the deadline to contribute to these plans is November 30.
In this short video, Advance Capital Management financial adviser Ian Smith highlights what AT&T employees should know:
AT&T Employee Stock Purchase and Deferral Plan
To review, here are the basic features of AT&T’s employee stock purchase and deferral plan:
You can contribute from 6% to 30% of your eligible compensation
You can receive a 20% AT&T stock match
That return on your contribution is pretty good, considering you won’t find a 20% guaranteed return in the stock market. However, when it comes to owning AT&T stock, there is more to consider than just the return, as we discuss below.
AT&T Employee Cash Deferral Plan
In addition to the stock purchase plan, you have access to the cash deferral plan. This could be a source of a more stable return on your money.
Here are the basic features of AT&T’s employee cash deferral plan:
You can contribute from 1% to 25% of your eligible compensation
For 2022, you can earn an interest rate of 2.91% on your cash deferrals
Keep in mind the deadline for electing deferrals is the last business day of December.
As you can see, you have a lot of options with these plans. They are benefits you should probably take advantage of, but in the right way. Whether you should contribute, defer or both, and in what amounts varies from employee to employee. The right option for you will depend on personal factors, such as your income, tax bracket and retirement date.
Therefore, if you want to participate in these plans, consider working with an AT&T-experienced financial adviser who can help answer your specific questions and review your situation.
A Brief Note on Owning AT&T Stock
While it can be rewarding to own a piece of a respected company like AT&T, it may be risky from a retirement planning perspective if you own too much AT&T stock. You don’t want your entire financial life – your current income and retirement income – to depend on the performance of one company.
It’s more appropriate to diversify the investments in your AT&T 401(k) account. By owning a wider array of investments, you can reduce your overall risk but also increase your exposure to growth. The right mix of funds depends on your specific needs and goals and the level of risk you’re comfortable with.