There are just a couple of things almost all iHeartMedia 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 iHeartMedia 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 iHeartMedia retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective iHeartMedia retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, iHeartMedia 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 iHeartMedia.
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 iHeartMedia offer to its employees?
iHeartMedia offers a 401(k) retirement savings plan to help employees save for their future.
Does iHeartMedia provide any matching contributions to the 401(k) plan?
Yes, iHeartMedia offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the eligibility requirement for employees to participate in iHeartMedia's 401(k) plan?
Employees at iHeartMedia are eligible to participate in the 401(k) plan after completing a specified period of service, typically within the first year of employment.
Can employees of iHeartMedia choose how much to contribute to their 401(k) plan?
Yes, employees can choose to contribute a percentage of their salary to the iHeartMedia 401(k) plan, within the limits set by the IRS.
Are there any fees associated with iHeartMedia's 401(k) plan?
Yes, like most 401(k) plans, iHeartMedia's plan may have administrative fees and investment fees, which are disclosed in the plan documents.
What investment options are available in iHeartMedia's 401(k) plan?
iHeartMedia offers a range of investment options in its 401(k) plan, including mutual funds, target-date funds, and other investment vehicles.
How often can employees change their contribution amounts to the iHeartMedia 401(k) plan?
Employees can typically change their contribution amounts to the iHeartMedia 401(k) plan on a quarterly basis or as specified in the plan documents.
Does iHeartMedia allow for loans against the 401(k) plan?
Yes, iHeartMedia's 401(k) plan may allow employees to take loans against their account balance, subject to certain terms and conditions.
What happens to my 401(k) account if I leave iHeartMedia?
If you leave iHeartMedia, you can choose to roll over your 401(k) account to another retirement plan, cash it out, or leave it in the iHeartMedia plan if allowed.
Is there a vesting schedule for the employer match in iHeartMedia's 401(k) plan?
Yes, iHeartMedia has a vesting schedule for employer matching contributions, which determines how much of the match you own based on your years of service.
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