There are just a couple of things almost all Silgan Holdings 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 Silgan Holdings 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 Silgan Holdings retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Silgan Holdings retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Silgan Holdings 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 Silgan Holdings.
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 plan does Silgan Holdings offer to its employees?
Silgan Holdings offers a 401(k) retirement savings plan to its employees.
How can employees at Silgan Holdings enroll in the 401(k) plan?
Employees can enroll in the Silgan Holdings 401(k) plan by completing the enrollment process online through the company’s benefits portal.
Does Silgan Holdings provide a company match for 401(k) contributions?
Yes, Silgan Holdings provides a company match for employee contributions to the 401(k) plan, up to a certain percentage.
What is the maximum contribution limit for the Silgan Holdings 401(k) plan?
The maximum contribution limit for the Silgan Holdings 401(k) plan is in accordance with IRS guidelines, which may change annually.
Can employees at Silgan Holdings take loans against their 401(k) savings?
Yes, employees at Silgan Holdings may have the option to take loans against their 401(k) savings, subject to the plan's terms.
What investment options are available in the Silgan Holdings 401(k) plan?
The Silgan Holdings 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
How often can employees at Silgan Holdings change their 401(k) contribution amounts?
Employees at Silgan Holdings can change their 401(k) contribution amounts at any time, subject to the plan's rules.
What happens to the 401(k) savings if an employee leaves Silgan Holdings?
If an employee leaves Silgan Holdings, they can roll over their 401(k) savings to another retirement account, cash out, or leave the funds in the Silgan Holdings plan, depending on the plan's provisions.
Is there a vesting schedule for the company match in the Silgan Holdings 401(k) plan?
Yes, Silgan Holdings has a vesting schedule for the company match, which determines when employees fully own the matched contributions.
Are there any fees associated with the Silgan Holdings 401(k) plan?
Yes, there may be administrative and investment fees associated with the Silgan Holdings 401(k) plan, which are disclosed in the plan documents.
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