There are just a couple of things almost all Continental Resources 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 Continental Resources 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 Continental Resources retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Continental Resources retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Continental Resources 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 Continental Resources.
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 Continental Resources offer to its employees?
Continental Resources offers a 401(k) retirement savings plan to help employees save for retirement.
Does Continental Resources provide a matching contribution for its 401(k) plan?
Yes, Continental Resources provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
How can employees at Continental Resources enroll in the 401(k) plan?
Employees at Continental Resources can enroll in the 401(k) plan by completing the enrollment process through the company’s HR portal.
What is the eligibility requirement for participating in Continental Resources' 401(k) plan?
Employees must be at least 21 years old and have completed a minimum period of service to be eligible for Continental Resources' 401(k) plan.
Can employees of Continental Resources choose how much they want to contribute to their 401(k) plan?
Yes, employees of Continental Resources can choose their contribution percentage, subject to IRS limits.
What investment options are available in the Continental Resources 401(k) plan?
The Continental Resources 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds.
How often can employees at Continental Resources change their 401(k) contributions?
Employees at Continental Resources can change their 401(k) contributions at any time, subject to payroll processing deadlines.
What happens to the 401(k) savings if an employee leaves Continental Resources?
If an employee leaves Continental Resources, they can roll over their 401(k) balance to another retirement account or take a distribution, subject to tax implications.
Does Continental Resources allow for loans against the 401(k) plan?
Yes, Continental Resources allows employees to take loans against their 401(k) plan, subject to specific terms and conditions.
Are there any fees associated with the Continental Resources 401(k) plan?
Yes, there may be administrative fees associated with the Continental Resources 401(k) plan, which are disclosed in the plan documents.
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