There are just a couple of things almost all Calumet Specialty Products Partners 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 Calumet Specialty Products Partners 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 Calumet Specialty Products Partners retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Calumet Specialty Products Partners retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Calumet Specialty Products Partners 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 Calumet Specialty Products Partners.
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 Calumet Specialty Products Partners offer to its employees?
Calumet Specialty Products Partners offers a 401(k) retirement savings plan to its employees.
How can employees of Calumet Specialty Products Partners enroll in the 401(k) plan?
Employees can enroll in the Calumet Specialty Products Partners 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
Does Calumet Specialty Products Partners match employee contributions to the 401(k) plan?
Yes, Calumet Specialty Products Partners provides a matching contribution to employee 401(k) contributions, subject to certain limits and conditions.
What is the maximum contribution limit for the 401(k) plan at Calumet Specialty Products Partners?
The maximum contribution limit for the Calumet Specialty Products Partners 401(k) plan is in accordance with IRS guidelines, which may change annually.
Can employees of Calumet Specialty Products Partners take loans against their 401(k) savings?
Yes, employees of Calumet Specialty Products Partners may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.
What investment options are available in the Calumet Specialty Products Partners 401(k) plan?
The Calumet Specialty Products Partners 401(k) plan typically offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.
How often can employees change their contribution amounts to the 401(k) plan at Calumet Specialty Products Partners?
Employees at Calumet Specialty Products Partners can typically change their contribution amounts at any time, but specific guidelines should be confirmed with the HR department.
Is there a vesting schedule for employer contributions in the Calumet Specialty Products Partners 401(k) plan?
Yes, Calumet Specialty Products Partners has a vesting schedule for employer contributions, which determines how much of the employer match employees are entitled to upon leaving the company.
What happens to my 401(k) savings if I leave Calumet Specialty Products Partners?
If you leave Calumet Specialty Products Partners, you can choose to roll over your 401(k) savings to another retirement account, withdraw the funds, or leave the savings in the Calumet plan if permitted.
Are there any fees associated with the 401(k) plan at Calumet Specialty Products Partners?
Yes, there may be administrative fees associated with the 401(k) plan at Calumet Specialty Products Partners, which are disclosed in the plan documents provided to employees.
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