There are just a couple of things almost all Ryerson Holding 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 Ryerson Holding 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 Ryerson Holding retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Ryerson Holding retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Ryerson Holding 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 Ryerson Holding.
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 Ryerson Holding offer to its employees?
Ryerson Holding offers a 401(k) retirement savings plan to help employees save for their future.
Does Ryerson Holding match employee contributions to the 401(k) plan?
Yes, Ryerson Holding provides a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the eligibility requirement for Ryerson Holding employees to participate in the 401(k) plan?
Employees of Ryerson Holding are eligible to participate in the 401(k) plan after completing a specified period of service, typically within the first year of employment.
How can Ryerson Holding employees enroll in the 401(k) plan?
Ryerson Holding employees can enroll in the 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.
What types of investment options are available in Ryerson Holding's 401(k) plan?
Ryerson Holding's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.
Can Ryerson Holding employees change their contribution percentage to the 401(k) plan?
Yes, employees at Ryerson Holding can change their contribution percentage at any time, subject to the plan's guidelines.
Is there a vesting schedule for Ryerson Holding's 401(k) matching contributions?
Yes, Ryerson Holding has a vesting schedule for matching contributions, which means employees must work for a certain period before they fully own the matched funds.
How often can Ryerson Holding employees make changes to their investment choices within the 401(k) plan?
Ryerson Holding employees can typically make changes to their investment choices on a quarterly basis or as specified in the plan documents.
What resources does Ryerson Holding provide to help employees manage their 401(k) accounts?
Ryerson Holding provides access to financial advisors, online tools, and educational materials to help employees manage their 401(k) accounts effectively.
Are there any fees associated with Ryerson Holding's 401(k) plan?
Yes, there may be administrative fees and investment-related fees associated with Ryerson Holding's 401(k) plan, which are disclosed in the plan documents.
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