There are just a couple of things almost all United Natural Foods 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 United Natural Foods 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 United Natural Foods retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective United Natural Foods retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, United Natural Foods 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 United Natural Foods.
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 United Natural Foods?
The 401(k) plan at United Natural Foods 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 United Natural Foods 401(k) plan?
You can enroll in the United Natural Foods 401(k) plan by accessing the employee portal and completing the enrollment process during the designated enrollment period.
Does United Natural Foods offer a company match for the 401(k) contributions?
Yes, United Natural Foods offers a company match on employee contributions to the 401(k) plan, helping to boost your retirement savings.
What is the maximum contribution limit for the United Natural Foods 401(k) plan?
The maximum contribution limit for the United Natural Foods 401(k) plan is in accordance with IRS guidelines, which may change annually. For 2023, the limit is $22,500 for employees under age 50.
Can I change my contribution percentage to the United Natural Foods 401(k) plan?
Yes, employees can change their contribution percentage to the United Natural Foods 401(k) plan at any time through the employee portal.
What investment options are available in the United Natural Foods 401(k) plan?
The United Natural Foods 401(k) plan offers a variety of investment options, including mutual funds and target-date funds, to help employees diversify their retirement savings.
When can I access my funds from the United Natural Foods 401(k) plan?
You can access your funds from the United Natural Foods 401(k) plan upon reaching retirement age, or in cases of hardship or termination of employment, subject to plan rules.
Does United Natural Foods allow loans against my 401(k) balance?
Yes, United Natural Foods allows employees to take loans against their 401(k) balance, subject to certain terms and conditions outlined in the plan.
What happens to my 401(k) plan if I leave United Natural Foods?
If you leave United Natural Foods, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the United Natural Foods plan if allowed.
Is there a vesting schedule for the United Natural Foods 401(k) company match?
Yes, United Natural Foods has a vesting schedule for the company match, which means you must work for a certain period before you fully own the matched contributions.
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