There are just a couple of things almost all CACI International retirees need when they hit retirement: predictable income and protection against a cluster of risks, which include longevity risk, performance risk and sequence-of-returns risk.
In the past we have seen retiring CACI International employees utilize the “4% rule,” where retirees take annual withdrawals start at 4% of the entire portfolio and increase with inflation. They then keep the remainder of the portfolio with at least 50% invested in equities. Based on historical data, this would give a CACI International retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective CACI International retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, CACI International retirees need to prepare for expenses over a longer time frame. In the past we would plan for a 15 to 20 year retirement, but now we need to prepare for a 30 to 35 year retirement. What is available to assist meeting the 35-year time frame?
The annuity strategy can assist with a few of the pitfalls we see in the 4% rule. For example:
If you need $50,000 per year in retirement and need that for 30 years, you may need $1.2 million in fixed income at a 3% interest rate. BUT if you look to fund $50,000 for 30 years, you can cover that expense with $800,000 by choosing the annuity option.
The other pitfall with the 4% rule is that it may not reflect a client’s risk tolerance. When you are accumulating assets, you can afford more volatility and can take on more risk than when in the retirement and withdrawal phase after leaving CACI International.
Also, should we see a drop in the market, you would be able to reduce your income using the 4% rule, which you cannot do if you choose an annuity option.
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What type of retirement savings plan does CACI International offer to its employees?
CACI International offers a 401(k) Savings Plan to help employees save for retirement.
How can I enroll in the CACI International 401(k) Savings Plan?
Employees can enroll in the CACI International 401(k) Savings Plan through the company’s HR portal or by contacting the HR department for assistance.
Does CACI International match employee contributions to the 401(k) plan?
Yes, CACI International provides a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.
What is the maximum contribution limit for the CACI International 401(k) Savings Plan?
The maximum contribution limit for the CACI International 401(k) Savings Plan is determined by the IRS guidelines, which are updated annually.
Can I change my contribution rate to the CACI International 401(k) Savings Plan at any time?
Yes, employees can change their contribution rate to the CACI International 401(k) Savings Plan at any time, subject to certain restrictions.
What investment options are available in the CACI International 401(k) Savings Plan?
The CACI International 401(k) Savings Plan offers a variety of investment options, including mutual funds, stocks, and bonds.
When can I access my funds from the CACI International 401(k) Savings Plan?
Employees can access their funds from the CACI International 401(k) Savings Plan upon reaching retirement age, or in cases of hardship, as defined by the plan.
Does CACI International allow for loans against my 401(k) savings?
Yes, CACI International allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.
What happens to my CACI International 401(k) Savings Plan if I leave the company?
If you leave CACI International, you can either roll over your 401(k) savings into another retirement account, cash out, or leave the funds in the plan, depending on the balance.
Is there a vesting schedule for the CACI International 401(k) Savings Plan?
Yes, CACI International has a vesting schedule for employer contributions, which determines how much of the employer match you can keep if you leave the company.
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