There are just a couple of things almost all Ingredion 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 Ingredion 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 Ingredion retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Ingredion retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Ingredion 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 Ingredion.
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 401k plan offered by Ingredion?
The 401k plan offered by Ingredion is a retirement savings plan that allows employees to save a portion of their earnings on a tax-deferred basis.
How does Ingredion match employee contributions to the 401k plan?
Ingredion matches employee contributions to the 401k plan up to a certain percentage, helping employees maximize their retirement savings.
Can employees of Ingredion choose how their 401k contributions are invested?
Yes, employees of Ingredion can choose from a variety of investment options within the 401k plan to align with their retirement goals.
What is the eligibility requirement for Ingredion's 401k plan?
To be eligible for Ingredion's 401k plan, employees typically need to meet specific criteria such as age and length of service.
When can employees of Ingredion enroll in the 401k plan?
Employees of Ingredion can enroll in the 401k plan during the initial enrollment period or during open enrollment periods as specified by the company.
How can Ingredion employees change their 401k contribution amount?
Ingredion employees can change their 401k contribution amount by submitting a request through the company’s HR portal or by contacting the HR department.
Does Ingredion offer a loan option against the 401k savings plan?
Yes, Ingredion does offer a loan option against the 401k savings plan, allowing employees to borrow from their savings under certain conditions.
What happens to my 401k savings if I leave Ingredion?
If you leave Ingredion, you have several options for your 401k savings, including rolling it over to another retirement account or cashing it out, subject to taxes and penalties.
Are there any fees associated with Ingredion's 401k plan?
Yes, there may be administrative fees associated with Ingredion's 401k plan, which are disclosed in the plan documents provided to employees.
Can Ingredion employees access their 401k funds while still employed?
Generally, Ingredion employees cannot access their 401k funds while still employed, except through loans or hardship withdrawals as permitted by the plan.
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