There are just a couple of things almost all Enovis 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 Enovis 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 Enovis retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Enovis retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Enovis 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 Enovis.
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 Enovis 401(k) plan?
The Enovis 401(k) plan is a retirement savings plan that allows employees to save a portion of their salary for retirement on a tax-deferred basis.
How can I enroll in the Enovis 401(k) plan?
Employees can enroll in the Enovis 401(k) plan by completing the enrollment process through the company's HR portal or by contacting the HR department for assistance.
Does Enovis offer a company match for the 401(k) contributions?
Yes, Enovis offers a company match for employee contributions to the 401(k) plan, which helps employees maximize their retirement savings.
What is the eligibility requirement to participate in the Enovis 401(k) plan?
To be eligible to participate in the Enovis 401(k) plan, employees must meet specific criteria, which typically include being a full-time employee and completing a certain period of service.
How much can I contribute to the Enovis 401(k) plan?
Employees can contribute up to the IRS limit set for 401(k) plans each year. Enovis may also allow for additional catch-up contributions for eligible employees.
Can I change my contribution percentage in the Enovis 401(k) plan?
Yes, employees can change their contribution percentage at any time by accessing their account through the Enovis HR portal or contacting HR.
What investment options are available in the Enovis 401(k) plan?
The Enovis 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 I access my Enovis 401(k) funds?
Employees can access their Enovis 401(k) funds upon reaching retirement age, or under certain circumstances such as financial hardship or termination of employment.
Are there any fees associated with the Enovis 401(k) plan?
Yes, the Enovis 401(k) plan may have administrative fees and investment-related expenses, which are disclosed in the plan documents provided to employees.
How does the Enovis 401(k) plan handle loans?
The Enovis 401(k) plan allows eligible employees to take loans against their vested balance, subject to specific terms and conditions outlined in the plan documents.
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