There are just a couple of things almost all Euronet Worldwide 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 Euronet Worldwide 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 Euronet Worldwide retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Euronet Worldwide retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Euronet Worldwide 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 Euronet Worldwide.
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 Euronet Worldwide offer to its employees?
Euronet Worldwide offers a 401(k) retirement savings plan to its employees.
How can employees of Euronet Worldwide enroll in the 401(k) plan?
Employees of Euronet Worldwide can enroll in the 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
Does Euronet Worldwide match employee contributions to the 401(k) plan?
Yes, Euronet Worldwide offers a matching contribution to the 401(k) plan, subject to specific terms and conditions.
What is the maximum contribution limit for the 401(k) plan at Euronet Worldwide?
The maximum contribution limit for the 401(k) plan at Euronet Worldwide is in line with the IRS limits, which may change annually.
Are there any vesting requirements for the employer match in Euronet Worldwide’s 401(k) plan?
Yes, Euronet Worldwide has a vesting schedule for the employer match, which employees should review in the plan documents.
Can employees of Euronet Worldwide take loans against their 401(k) savings?
Yes, Euronet Worldwide allows employees to take loans against their 401(k) savings, subject to the plan’s rules and regulations.
What investment options are available in Euronet Worldwide’s 401(k) plan?
Euronet Worldwide’s 401(k) plan offers a variety of investment options, including mutual funds and other investment vehicles, which employees can choose from.
How often can employees change their contribution amounts in Euronet Worldwide’s 401(k) plan?
Employees at Euronet Worldwide can change their contribution amounts on a regular basis, typically during open enrollment or at any time as permitted by the plan.
What happens to the 401(k) savings if an employee leaves Euronet Worldwide?
If an employee leaves Euronet Worldwide, they have several options for their 401(k) savings, including rolling it over to another retirement account or leaving it in the Euronet Worldwide plan, if allowed.
Does Euronet Worldwide provide any educational resources for employees regarding their 401(k) plan?
Yes, Euronet Worldwide provides educational resources and tools to help employees understand their 401(k) plan and make informed investment decisions.
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