There are just a couple of things almost all Chemours 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 Chemours 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 Chemours retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Chemours retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Chemours 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 Chemours.
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 is the Chemours 401(k) Savings Plan?
The Chemours 401(k) Savings Plan is a retirement savings plan that allows eligible employees to save for their future by contributing a portion of their salary on a pre-tax or after-tax basis.
How can Chemours employees enroll in the 401(k) Savings Plan?
Chemours employees can enroll in the 401(k) Savings Plan by completing the online enrollment process through the company's benefits portal during the enrollment period.
What is the matching contribution offered by Chemours for the 401(k) Savings Plan?
Chemours offers a matching contribution to the 401(k) Savings Plan, which typically matches a percentage of employee contributions, up to a certain limit.
Are there any eligibility requirements for Chemours employees to participate in the 401(k) Savings Plan?
Yes, Chemours employees must meet specific eligibility requirements, such as being a full-time employee and reaching a minimum age, to participate in the 401(k) Savings Plan.
Can Chemours employees change their contribution amounts to the 401(k) Savings Plan?
Yes, Chemours employees can change their contribution amounts to the 401(k) Savings Plan at any time through the benefits portal.
What investment options are available in the Chemours 401(k) Savings Plan?
The Chemours 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles tailored to different risk levels.
How often can Chemours employees review their 401(k) account statements?
Chemours employees can review their 401(k) account statements quarterly, and they can also access their account information online at any time.
What happens to Chemours employees' 401(k) savings if they leave the company?
If Chemours employees leave the company, they have several options for their 401(k) savings, including rolling over the balance to another retirement account or withdrawing the funds, subject to tax implications.
Is there a loan option available through the Chemours 401(k) Savings Plan?
Yes, Chemours employees may have the option to take a loan against their 401(k) savings, subject to the plan's rules and regulations.
How does Chemours support employees in managing their 401(k) investments?
Chemours provides resources such as financial education seminars, online tools, and access to financial advisors to help employees manage their 401(k) investments effectively.
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