There are just a couple of things almost all Stryker 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 Stryker 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 Stryker retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Stryker retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Stryker 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 Stryker.
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 Stryker's 401(k) plan?
Stryker's 401(k) plan is a retirement savings plan that allows employees to save a portion of their earnings on a tax-deferred basis.
How can I enroll in Stryker's 401(k) plan?
Employees can enroll in Stryker's 401(k) plan by accessing the benefits portal during the enrollment period or by contacting the HR department for assistance.
Does Stryker offer a company match for the 401(k) contributions?
Yes, Stryker offers a company match for employee contributions to the 401(k) plan, which helps to enhance your retirement savings.
What is the maximum contribution limit for Stryker's 401(k) plan?
The maximum contribution limit for Stryker's 401(k) plan is subject to IRS regulations, which may change annually. Employees should check the latest guidelines for the current limit.
When can I start contributing to Stryker's 401(k) plan?
Employees can start contributing to Stryker's 401(k) plan after completing the eligibility requirements set by the company.
Can I change my contribution percentage in Stryker's 401(k) plan?
Yes, employees can change their contribution percentage to Stryker's 401(k) plan at any time, subject to the plan's guidelines.
What investment options are available in Stryker's 401(k) plan?
Stryker'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.
Is there a vesting schedule for Stryker's 401(k) company match?
Yes, Stryker has a vesting schedule for the company match in the 401(k) plan, which determines how much of the employer contributions you own based on your years of service.
How can I access my Stryker 401(k) account information?
Employees can access their Stryker 401(k) account information through the online benefits portal or by contacting the plan administrator.
What happens to my Stryker 401(k) if I leave the company?
If you leave Stryker, you have several options for your 401(k) savings, including rolling it over to another retirement account, cashing it out, or leaving it in the plan if eligible.
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