There are just a couple of things almost all Taylor Morrison Home 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 Taylor Morrison Home 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 Taylor Morrison Home retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Taylor Morrison Home retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Taylor Morrison Home 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 Taylor Morrison Home.
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 Taylor Morrison Home?
The 401(k) plan at Taylor Morrison Home is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How can I enroll in the 401(k) plan at Taylor Morrison Home?
Employees can enroll in the 401(k) plan at Taylor Morrison Home by completing the enrollment process through the company’s benefits portal or by contacting the HR department for assistance.
What is the employer match for the 401(k) plan at Taylor Morrison Home?
Taylor Morrison Home offers a competitive employer match for the 401(k) plan, which typically matches a percentage of employee contributions up to a certain limit.
Are there any eligibility requirements to participate in Taylor Morrison Home's 401(k) plan?
Yes, employees must meet specific eligibility criteria, such as being a full-time employee and completing a certain period of service, to participate in Taylor Morrison Home's 401(k) plan.
What types of investment options are available in the Taylor Morrison Home 401(k) plan?
The 401(k) plan at Taylor Morrison Home offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees grow their retirement savings.
Can I take a loan from my 401(k) plan at Taylor Morrison Home?
Yes, Taylor Morrison Home allows employees to take loans from their 401(k) plan, subject to specific terms and conditions outlined in the plan documents.
How often can I change my contribution amount to the 401(k) plan at Taylor Morrison Home?
Employees at Taylor Morrison Home can change their contribution amount to the 401(k) plan at any time, typically through the benefits portal or by contacting HR.
What happens to my 401(k) if I leave Taylor Morrison Home?
If you leave Taylor Morrison Home, you have several options for your 401(k), including rolling it over to an IRA or a new employer’s plan, cashing it out, or leaving it with Taylor Morrison Home.
Is there a vesting schedule for the employer match in Taylor Morrison Home's 401(k) plan?
Yes, Taylor Morrison Home has a vesting schedule for the employer match, which means that employees must work for a certain number of years before they fully own the matched funds.
Can I contribute to my 401(k) plan at Taylor Morrison Home if I am also contributing to an IRA?
Yes, employees can contribute to both a 401(k) plan at Taylor Morrison Home and an IRA, as long as they adhere to the contribution limits set by the IRS.
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