There are just a couple of things almost all EnLink Midstream 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 EnLink Midstream 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 EnLink Midstream retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective EnLink Midstream retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, EnLink Midstream 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 EnLink Midstream.
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 primary purpose of the 401(k) plan at EnLink Midstream?
The primary purpose of the 401(k) plan at EnLink Midstream is to help employees save for retirement by allowing them to contribute a portion of their salary on a pre-tax basis.
How can employees enroll in the 401(k) plan at EnLink Midstream?
Employees can enroll in the 401(k) plan at EnLink Midstream by accessing the enrollment portal through the company's HR website or by contacting the HR department for assistance.
Does EnLink Midstream offer a company match for 401(k) contributions?
Yes, EnLink Midstream offers a company match for employee contributions to the 401(k) plan, which helps employees increase their retirement savings.
What types of investment options are available in EnLink Midstream's 401(k) plan?
EnLink Midstream's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.
When can employees start contributing to the 401(k) plan at EnLink Midstream?
Employees at EnLink Midstream can start contributing to the 401(k) plan after they have completed their eligibility requirements, typically within their first few months of employment.
What is the maximum contribution limit for the 401(k) plan at EnLink Midstream?
The maximum contribution limit for the 401(k) plan at EnLink Midstream follows the IRS guidelines, which may change annually. Employees should check the current limits for the specific year.
Can employees take loans against their 401(k) balance at EnLink Midstream?
Yes, EnLink Midstream allows employees to take loans against their 401(k) balance, subject to the plan's terms and conditions.
What happens to an employee's 401(k) balance if they leave EnLink Midstream?
If an employee leaves EnLink Midstream, they can choose to roll over their 401(k) balance to another retirement account, cash it out (which may incur penalties), or leave it in the EnLink Midstream plan if allowed.
Is there a vesting schedule for the company match in EnLink Midstream's 401(k) plan?
Yes, EnLink Midstream has a vesting schedule for the company match, meaning employees must work for a certain period before they fully own the matched contributions.
How often can employees change their contribution amounts in EnLink Midstream's 401(k) plan?
Employees at EnLink Midstream can typically change their contribution amounts at any time, subject to the plan's guidelines.
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