A Retirement Planning Guide for Procter & Gamble Employees: Understanding Your Savings Plan, STAR Award, and P&G Stock Exposure

P&G employees enjoy a comprehensive benefits package, but that also means retirement planning can feel overwhelming. Between the P&G Savings Plan, the STAR award, and the PST, it’s easy to end up with a portfolio that’s unbalanced or unclear.

This guide breaks down the key components of your P&G retirement benefits and outlines considerations to help you make informed decisions as you plan for financial independence.

1. Understanding the P&G Savings Plan

The P&G Savings Plan is the core retirement savings vehicle for employees — similar to a 401(k), but with some unique features.

Traditional vs. Roth Contributions

Employees can contribute to:

• Traditional (pre-tax): lowers taxable income today by lowering your Adjusted Gross Income dollar-for-dollar

• Roth (after-tax): grows tax-free and withdrawals in retirement are tax-free

Choosing between them depends on current vs. future tax expectations, cash flow, and long-term planning. Virgil Wealth would be happy to walk you through an analysis of your specific situation.

Company Contributions

P&G provides company contributions based on your pay and tenure. This is a significant benefit and forms the foundation of many employees' retirement portfolios.

Investment Menu Overview

The plan usually offers:

• Lifecycle/Target-Date Funds

• Core Index Funds (U.S. equity, international equity, bonds)

• Stable Value or Guaranteed Funds

• Company Stock (PG)

• Self-Directed Brokerage Window (optional for advanced investors)

Each option carries different levels of risk, diversification, and cost. Many employees unknowingly end up with:

• Too much in the default fund

• Too conservative or aggressive allocations

• High exposure to P&G stock through contributions + STAR awards

Regularly reviewing your allocation helps ensure your investments align with your goals, time horizon, and risk tolerance.

2. How the P&G STAR Award Works

The STAR Award (Short-Term Achievement Reward) is one of P&G’s most valuable employee benefits, reserved for full-time banded employees (not BTAs), with Long-term Incentive Plan (LTIP) reserved for Band 3 and above. It typically is rewarded in cash and stock, but employees may sometimes elect to receive in stock options or Restricted Stock Units (RSUs) in lieu of cash. STAR awards are granted based on a formula, derived from both overall company performance and business unit performance. The formula can be confusing, and we are here to help with any questions.

3. The P&G Profit Sharing Trust (PST)

The PST is another company-funded retirement account, with annual grants of P&G common and preferred stock (preferred stock discontinued in 2025) given to employees.

Why it matters for retirement planning

The PST often create unintended concentration in P&G stock, especially for long-tenured employees. Over 10–20 years, awards accumulate and compound, meaning:

• Portfolio risk increases

• Retirement savings depend heavily on one company

• A downturn in P&G stock could significantly affect your net worth

Understanding how much of your PST is vested, unvested, or tied to performance helps you plan for taxes, diversification, and timing of sales.

4. The Hidden Risk of a Concentrated P&G Stock Position

Many P&G employees hold a significant amount of their total retirement assets in PG shares — often without realizing it.

Why concentration is risky

Holding a single stock increases:

• Volatility risk

• Career + portfolio risk overlap

• Retirement timing risk (if the stock declines right before retiring)

Even great companies like P&G can experience:

• Periods of underperformance

• Industry disruptions

• Shifts in consumer behavior

• Regulatory or economic shocks

What’s a healthier approach?

You don’t have to sell all PG stock, but diversification helps:

• Reduce risk

• Smooth returns

• Improve long-term financial stability

A customized, diversified portfolio may use:

• U.S. ETFs

• International ETFs

• Bond ETS

• Real Estate

The goal: avoid one company determining your financial future.

5. How to Build a Balanced Plan Using P&G Benefits

Here’s a framework that can help P&G employees take control of their retirement strategy:

Step 1 — Evaluate your current allocation

• What percentage is in PG stock?

• How is the rest distributed among stocks, bonds, and cash?

Step 2 — Review your P&G Stock exposure

• Track vested and unvested shares

• Review when awards vest or convert to shares

• Understand tax implications of selling

Step 3 — Set target allocation based on your goals

• Time until retirement

• Risk tolerance

• Income needs

• Other sources of savings or pensions

Step 4 — Decide on a diversification strategy

Options include:

• Rebalancing within the Savings Plan

• Selling vested shares over time

• Redirecting new contributions to diversified funds

Step 5 — Revisit your plan annually

Life changes. Markets change. Tax laws change.
A yearly review helps keep your strategy aligned with your goals.

Conclusion

Procter & Gamble’s retirement benefits create an amazing foundation for financial independence, but only if managed with intention. Understanding your Savings Plan options, STAR award mechanics, and stock concentration risks can help you build a more resilient, tax-efficient, and long-term strategy.

At Virgil Wealth, we work with many P&G employees and retirees to create personalized retirement plans that simplify these decisions and bring clarity to every stage of your career.

Retirement Planning Checklist: What to Do 5 Years Before Retiring

You’ve spent decades saving and working toward retirement, but the final five years before you stop working are the most important.
This is when your focus shifts from building wealth to preserving and distributing it wisely.

At Virgil Wealth, we help clients simplify this transition so they can step into retirement with confidence, clarity, and peace of mind.

1. Estimate Your Retirement Expenses and Income

Your retirement plan starts with understanding what your lifestyle will actually cost and where your income will come from.

Steps to take:

• Estimate monthly expenses, including healthcare, travel, housing, and hobbies.

• Review projected income from Social Security, pensions, and investment accounts.

• Identify any income gaps and plan how to fill them.

2. Plan Your Social Security and/or Pension Strategy

Timing is extremely important when it comes to Social Security and pension distributions.

Evaluate:

• The best age to begin benefits; delaying until age 70 can significantly increase payments.

• Spousal and survivor benefits if you’re married.

• Coordination with other income sources to manage taxes.

3. Create a Tax-Efficient Withdrawal Plan

Without careful planning, taxes can erode your retirement income. We will help prevent that from happening!

Checklist:

• Decide the order to draw from accounts (taxable → tax-deferred → tax-free).

• Consider partial Roth conversions before RMDs (Required Minimum Distributions) begin.

• Plan withdrawals to stay in lower tax brackets and manage Medicare surcharges.

4. Prepare for Healthcare and Long-Term Care Costs

Healthcare is one of the largest retirement expenses, and in our experience, often underestimated.

Steps:

• Review Medicare options (Parts A, B, D, and supplemental plans).

• Consider long-term care insurance or hybrid life/long-term care policies.

• Build medical costs into your retirement budget.

5. Update Estate and Legacy Plans

Your estate plan ensures your wealth is transferred smoothly and according to your wishes.

Key items to review:

• Create or update wills, trusts, and beneficiary designations.

• Review powers of attorney and healthcare directives.

• Discuss charitable giving (direct or through Donor-Advised Funds) or legacy goals.

6. Meet With a Fiduciary Financial Advisor

A trusted advisor can coordinate your investments, taxes, estate, and retirement income strategy, helping you avoid costly mistakes and optimize your retirement.

At Virgil Wealth, we specialize in guiding clients through the final stretch before retirement, ensuring every detail of your plan is aligned with your goals.

The five years before retirement are critical. By refining your plan now, you’ll be positioned to enjoy the freedom you’ve worked so hard to achieve. Schedule a free 15 minute consultation by clicking the button below.

Financial Planning for Physicians - Smart Strategies

We know that physicians routinely face unique financial challenges, including grappling with significant student debt loads, handling complex compensation negotiations, buying/selling practices or practice-related real estate, etc. Here are some strategies Virgil Wealth recommends:

Build a solid foundation during residency

• Build and stick to your budget. Income will likely never be lower in your professional career, so build the habits early so they stick with you later

• Start your saving now! Create an emergency fund that can last 4-6 months if needed

• Establish a Roth IRA while income is low to start the long-term compounding effect

Tackle Med School Debt Wisely

We can help you weigh the pros and cons of different repayment options.

• Understand your rate and amortization. Let us help you explore refinancing options if and when they make sense

• Will you be earning a low salary during and after residency? Look into income-driven repayment plans

• If you plan to work in an academic hospital or a non-profit, explore Public Service Loan Forgiveness; this can save you thousands and thousands of dollars if you qualify

Protect your assets from Day 1

Your ability to earn is your most valuable asset. At Virgil Wealth, we suggest three different types of insurance:

• Disability insurance: Choose a policy tailored to your specialty.

• Umbrella liability insurance: Adds an extra layer of protection above home/auto coverage.

• Malpractice coverage: Review regularly to ensure limits match your risk profile.

Conclusion

From residency to retirement, physicians face financial decisions unlike any other profession. By addressing debt, protecting income, and planning proactively, you can achieve lasting financial independence — without sacrificing your quality of life.

At Virgil Wealth, we help physicians navigate every step of that journey with personalized, fiduciary advice. Schedule a free 15 minute consultation with us today to go deeper on these issues