There are just a couple of things almost all Quanta Services 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 Quanta Services 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 Quanta Services retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Quanta Services retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Quanta Services 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 Quanta Services.
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 401(k) plan offered by Quanta Services?
The 401(k) plan offered by Quanta Services is a retirement savings plan that allows employees to save a portion of their salary on a tax-deferred basis.
How can I enroll in the Quanta Services 401(k) plan?
Employees can enroll in the Quanta Services 401(k) plan during the initial enrollment period or during open enrollment periods by accessing the benefits portal.
Does Quanta Services match employee contributions to the 401(k) plan?
Yes, Quanta Services offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the maximum contribution limit for the Quanta Services 401(k) plan?
The maximum contribution limit for the Quanta Services 401(k) plan follows the IRS guidelines, which may change annually. Employees should check the latest limits for the current year.
Can I take a loan against my 401(k) plan with Quanta Services?
Yes, Quanta Services allows employees to take loans against their 401(k) plan, subject to specific terms and conditions outlined in the plan documents.
What investment options are available in the Quanta Services 401(k) plan?
The Quanta Services 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees diversify their portfolios.
How often can I change my contribution amount to the Quanta Services 401(k) plan?
Employees can change their contribution amounts to the Quanta Services 401(k) plan at any time, typically through the benefits portal or by contacting HR.
Is there a vesting schedule for the Quanta Services 401(k) matching contributions?
Yes, Quanta Services has a vesting schedule for matching contributions, which determines how much of the employer's contributions employees are entitled to based on their years of service.
What happens to my 401(k) plan if I leave Quanta Services?
If you leave Quanta Services, you have several options regarding your 401(k) plan, including rolling it over to another retirement account, cashing it out, or leaving it with Quanta Services until you reach retirement age.
Can I access my 401(k) funds while still employed at Quanta Services?
Generally, employees cannot access their 401(k) funds while still employed at Quanta Services unless they meet specific hardship criteria.
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