There are just a couple of things almost all Thermo Fisher Scientific 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 Thermo Fisher Scientific 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 Thermo Fisher Scientific retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Thermo Fisher Scientific retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Thermo Fisher Scientific 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 Thermo Fisher Scientific.
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 Thermo Fisher Scientific?
The 401(k) plan at Thermo Fisher Scientific is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax or after-tax basis.
How does Thermo Fisher Scientific match employee contributions to the 401(k) plan?
Thermo Fisher Scientific offers a company match on employee contributions, which helps to enhance the overall retirement savings of employees.
What is the eligibility requirement to participate in Thermo Fisher Scientific's 401(k) plan?
Employees of Thermo Fisher Scientific are typically eligible to participate in the 401(k) plan after completing a certain period of service, usually within the first year of employment.
Can employees at Thermo Fisher Scientific contribute to their 401(k) plan through payroll deductions?
Yes, employees at Thermo Fisher Scientific can contribute to their 401(k) plan through convenient payroll deductions, making it easy to save for retirement.
What investment options are available in Thermo Fisher Scientific's 401(k) plan?
Thermo Fisher Scientific's 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance and retirement goals.
Is there a vesting schedule for the company match in Thermo Fisher Scientific's 401(k) plan?
Yes, Thermo Fisher Scientific has a vesting schedule for the company match, meaning employees must work for a certain number of years before they fully own the matching contributions.
How can employees at Thermo Fisher Scientific access their 401(k) account information?
Employees can access their 401(k) account information through the online portal provided by Thermo Fisher Scientific's plan administrator.
What is the maximum contribution limit for the 401(k) plan at Thermo Fisher Scientific?
The maximum contribution limit for Thermo Fisher Scientific's 401(k) plan is subject to IRS guidelines, which can change annually.
Does Thermo Fisher Scientific offer a Roth 401(k) option?
Yes, Thermo Fisher Scientific offers a Roth 401(k) option, allowing employees to make after-tax contributions that can grow tax-free.
How often can employees at Thermo Fisher Scientific change their 401(k) contribution amounts?
Employees at Thermo Fisher Scientific can change their 401(k) contribution amounts at designated times throughout the year, typically during open enrollment or through specific plan provisions.
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