Executive Summary
Procter & Gamble’s decision to offer separation packages to more than 7,000 U.S.-based employees is a major transition point—especially for those approaching retirement or contemplating their next professional chapter. While these packages are often generous and carefully structured, they introduce significant financial decisions around income, taxes, healthcare, and investments.
Our firm has deep expertise and experience in helping P&G employees retire successfully and coordinate advanced strategies. This guide offers a planning lens specific to P&G employees evaluating whether to accept the 2025 separation package. Key areas include:
- Understanding if and how you can access retiree health benefits through P&G
- Reviewing the treatment of equity compensation, including LLIP, STAR, and RSUs
- Making informed decisions around the P&G Profit Sharing Trust (PST), including NUA strategy
- Coordinating tax and income planning in the year of separation and beyond
If you’re a long-tenured or senior-level employee, your decision will have long-term implications for your retirement readiness, estate plan, and portfolio structure. The goal of this article is to equip you with the right framework to assess the opportunity from all angles.
Understanding P&G’s Offer and Your Financial Situation
This separation initiative is part of a larger organizational streamlining at P&G, impacting corporate and managerial roles. Importantly, this isn’t a one-size-fits-all offer. For many, the separation package may include severance pay, continuation of certain benefits, and equity compensation treatment—potentially mirroring aspects of early retirement.
For those eligible, the offer could mark a natural pivot point. But the decision requires understanding what you’re gaining, what you’re giving up, and how your choices today shape the future.
Retiree Health Coverage: Are You Eligible and What’s It Worth?
If your years of service and age meet P&G’s internal criteria—typically a combination totaling 70 or more—you may be eligible for P&G’s retiree medical benefits. This can be a substantial value driver, particularly for those not yet 65 and needing to bridge coverage until Medicare eligibility.
The retiree plan may include the option to continue on P&G’s group plan or transition into a company-sponsored Medicare Advantage plan at age 65. If you don’t qualify, you’ll need to explore alternatives like COBRA, ACA exchange plans, or coverage through a spouse.
Check whether you meet the criteria and map out how coverage would continue, including deadlines and the interplay with Medicare enrollment.
Equity Compensation: Know the Fate of Your LLIP, STAR, and Stock Awards
Equity-based compensation is a core part of P&G’s reward structure. Depending on your role, you may have unvested STAR awards, LLIP elections, stock options, or RSUs.
Crucial questions to answer:
- Will unvested equity vest on a prorated basis?
- Will you retain the right to exercise options after separation?
- How will upcoming LLIP elections be treated?
Timing matters: exercising options in the same year you receive severance may push you into a higher tax bracket. Coordinate these moves with the rest of your income picture and model the after-tax outcomes.
Your PST and the NUA Strategy
The Profit Sharing Trust (PST) is a distinctive asset for many P&G employees. For long-tenured employees, it may represent one of the largest components of their retirement portfolio—often heavily weighted in P&G stock.
You have a few paths:
- Leave the PST in place temporarily to preserve Rule of 55 withdrawal rights (if you’re 55+ and separating)
- Rollover to an IRA for broader investment options
- Distribute appreciated P&G stock using Net Unrealized Appreciation (NUA), which allows capital gains treatment on the growth above cost basis
Each path has tax consequences. NUA can be a powerful strategy—but it has specific eligibility requirements and must be done correctly. There is a significant amount of coordination required that not all advisory firms have experience, expertise, or skillset on their teams to execute. At Wealth Dimensions, we have the strategic tax, investment, and operations expertise and team to execute these strategies successfully, and have done so many times for our valued clients.
Tax Timing and Income Coordination
In your separation year, your income could be unusually high due to severance, bonus, and equity activity. This presents a unique tax planning challenge.
Strategies to consider:
- Accelerate retirement contributions (401(k), HSA) while still employed
- Delay discretionary income events (like Roth conversions) to future lower-income years
- If your income will drop significantly post-separation, identify a tax-efficient way to draw down taxable, tax-deferred, and tax-free accounts
Understanding the income layering effect across tax years is key to minimizing lifetime tax liability.
Creating a Sustainable Withdrawal Strategy
Whether your plan is to retire completely or ease into part-time work, cash flow planning is essential, and optimizing how you’ll turn your assets into income (oftentimes called a “distribution strategy) is a major component to your retirement planning.
Start by identifying your fixed and variable expenses. Then:
- Use severance, unused PTO, and short-term cash to fund the first 6–12 months
- Build a laddered portfolio or “bucket” system to cover short-, mid-, and long-term income needs
- For retirees under 59½, explore penalty-free strategies like the Rule of 55 or 72(t) distributions from IRAs
Avoid withdrawing from equity-heavy accounts in down markets. Structure your assets to minimize the need for forced sales.
Timing Social Security and Enrolling in Medicare
Exiting the workforce early often brings Social Security into focus. Claiming at 62 locks in a reduced benefit, while waiting until full retirement age (FRA) or even age 70 increases monthly income.
If you’re eligible for retiree health, determine how it aligns with Medicare enrollment rules. Missing your Special Enrollment Period can result in lasting penalties.
Mapping out your income sources and healthcare coverage year-by-year can help you optimize both.
Working with the Right Professionals
This isn’t the time to go it alone. Key members of your planning team should include:
- A financial advisor to guide cash flow needs, investment allocation, account structure, and tax planning. Your financial advisor should operate as the “quarterback” of your financial life, coordinating the execution and proper documentation of the advanced strategies in this guide with your CPA and attorney.
- A CPA to document the tax strategies executed for proper filing.
- An attorney to review any non-compete clauses and update estate documents
Having an integrated team ensures all decisions—from PST rollovers to Roth conversion timing—are coordinated.
Closing Thoughts
For P&G employees, this separation package is more than an offer—it’s a turning point. It represents an opportunity to retire with dignity, launch a second act, or redesign your financial plan.
Every element—from retiree healthcare to stock option treatment to PST distributions—has strategic and irreversible consequences. Thoughtful planning today can set the stage for long-term financial clarity and peace of mind.
If you’re facing this decision, we’re here to help you weigh your options, navigate the complexities, and craft a plan that aligns with what matters most to you.
For informational purposes only. Not intended as investment advice or a recommendation of any particular security or strategy. Past performance is not indicative of future results. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealth Dimensions, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-554-6000. Please be advised that this material is not intended as legal or tax advice. Accordingly, any tax information provided in this material is not intended and cannot be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer.