John Shappell says he is counting on some help
from the $2.6 million profit-sharing plan sponsored by
his employer, Potteiger-Raintree of Glen Rock,
Pennsylvania. "But do I really think I'll have enough [to
retire on] as things stand now? I would probably say
"I think our profit-sharing plan is pretty decent,"
Shappell emphasizes, "especially since I don't pay anything
into it. But, I think it might be better to have a 401(k)
plan in which the company matched our contributions.
Eventually, I think that will happen, because our company
just merged with nine other roofing companies across the
country to form a much larger company (TECTA America
Corporation), and I believe it will probably have a 401(k)
at some point."
Shappell has been at Potteiger-Raintree for the past
nine years. The company is a commercial roofing contractor
that operates throughout the mid-Atlantic region. A
lifelong roofer and sheet metal mechanic, Shappell is the
company's service manager, a post that involves selling
service contracts and handling service work. He earns
$60,000 a year, plus a bonus when company profits warrant
it. He anticipates staying on the job for at least another
Because his employer's profit-sharing plan is dependent
upon the company's profitability, Shappell says he never
knows how much will be contributed to his account in any
given year. But he says that, right now, he has a balance
of about $40,000, and that he believes the company has been
generous with its plan.
Potteiger-Raintree President Tom Potteiger confirms that
the company has total discretion in determining whether it
will contribute to the plan each year and in determining
the size of any contribution. Once it does decide to make a
contribution, the company allocates the money to the
accounts of each participant according to a formula tied to
salary. For example, an employee whose salary represented
4% of the participant's total payroll would receive 4% of
that year's contribution to the plan.
The company launched its profit-sharing plan in 1983,
and uses a third-party administrator to manage it. About
42% of the plan's assets are invested in a core large-cap
domestic stock fund, and another 46% is invested in four
other stock portfolios, including a small-company fund, a
telecommunications fund and a biotech fund. About 10% of
the fund is invested in bonds, and the balance in cash.
Shappell has relatively modest plans for his retirement.
He would like to golf, do a little traveling with his wife
of 36 years, Kathryn, spend time with his grandchildren and
do some volunteer work. "I'd like to retire at 62,"
Shappell says, "or maybe semiretire. If I could work for
the company seven, eight or nine months of the year, and
then take a few months off, I would consider doing that,
too. I guess it all depends upon how I feel at that
Fortunately, the profit-sharing plan at Potteiger will
not be his sole source of retirement income. Having spent
many years as a member of Sheet Metal Workers Local 19 out
of Philadelphia, Shappell expects to draw a pension from
that organization, too. If he retires at age 65, his
benefit from that defined benefit plan would be $577 per
month. It would be less if he began to draw on the pension
at age 62.
Shappell also counts on receiving a Social Security
benefit of about $1,090 per month if he does choose to
retire at age 62, or about $1,500 a month if he doesn't
start drawing a benefit until the age of 65. The numbers
come from an earnings and benefits estimate statement he
received recently from the Social Security Administration.
He also expects his wife, who has worked at a variety of
jobs over the course of their life together, to receive
Social Security benefits, though somewhat lower than his
own. Finally, Shappell has a modest IRA account of about
$28,000, split evenly between two Vanguard mutual funds,
Windsor and the Vanguard Index 500 fund.
He also has an ownership interest in the building that
houses Potteiger-Raintree. (The firm leases the building
from Shappell and the other owners.) "I also just bought
2,500 shares of a small dot-com company, and I'm hoping
that turns out to be a decent investment," he says.top