There are just a couple of things almost all Hearst Corporation 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 Hearst Corporation 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 Hearst Corporation retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Hearst Corporation retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Hearst Corporation 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 Hearst Corporation.
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 Hearst Corporation 401(k) Savings Plan?
The Hearst Corporation 401(k) Savings Plan is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are deducted, helping them prepare for retirement.
How does the Hearst Corporation match contributions to the 401(k) Savings Plan?
Hearst Corporation offers a matching contribution to the 401(k) Savings Plan, typically matching a percentage of employee contributions, up to a certain limit.
When can employees at Hearst Corporation enroll in the 401(k) Savings Plan?
Employees at Hearst Corporation can enroll in the 401(k) Savings Plan during their initial onboarding period or during designated open enrollment periods throughout the year.
What types of investment options are available in the Hearst Corporation 401(k) Savings Plan?
The Hearst Corporation 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles tailored to different risk tolerances.
Are there any fees associated with the Hearst Corporation 401(k) Savings Plan?
Yes, the Hearst Corporation 401(k) Savings Plan may have administrative fees and investment-related fees, which are outlined in the plan documents provided to employees.
Can employees take loans from their Hearst Corporation 401(k) Savings Plan?
Yes, employees may have the option to take loans from their Hearst Corporation 401(k) Savings Plan, subject to certain conditions and limits.
What happens to my Hearst Corporation 401(k) Savings Plan if I leave the company?
If you leave Hearst Corporation, you have several options for your 401(k) Savings Plan, including rolling it over into an IRA or a new employer's plan, or cashing it out (though this may incur taxes and penalties).
How can I access my Hearst Corporation 401(k) Savings Plan account information?
Employees can access their Hearst Corporation 401(k) Savings Plan account information online through the plan's designated website or by contacting the plan administrator.
Is there a vesting schedule for the Hearst Corporation 401(k) Savings Plan?
Yes, the Hearst Corporation 401(k) Savings Plan may have a vesting schedule that determines when employees fully own the company's matching contributions.
Can I change my contribution rate to the Hearst Corporation 401(k) Savings Plan?
Yes, employees can change their contribution rate to the Hearst Corporation 401(k) Savings Plan, typically at any time, depending on the plan's rules.
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