There are just a couple of things almost all Urban Outfitters 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 Urban Outfitters 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 Urban Outfitters retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Urban Outfitters retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Urban Outfitters 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 Urban Outfitters.
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 savings plan does Urban Outfitters offer to its employees?
Urban Outfitters offers a 401(k) retirement savings plan to its employees.
Does Urban Outfitters match employee contributions to the 401(k) plan?
Yes, Urban Outfitters provides a company match for employee contributions to the 401(k) plan, subject to certain limits.
What is the eligibility requirement for Urban Outfitters employees to participate in the 401(k) plan?
Employees of Urban Outfitters are typically eligible to participate in the 401(k) plan after completing a certain period of service, usually within the first year of employment.
How can Urban Outfitters employees enroll in the 401(k) plan?
Urban Outfitters employees can enroll in the 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
What investment options are available in Urban Outfitters' 401(k) plan?
Urban Outfitters' 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
Can Urban Outfitters employees change their contribution percentage to the 401(k) plan?
Yes, Urban Outfitters employees can change their contribution percentage at any time, subject to plan rules.
What is the vesting schedule for Urban Outfitters’ 401(k) company match?
The vesting schedule for Urban Outfitters’ 401(k) company match typically follows a graded vesting schedule, which means employees earn ownership of the match over time.
Are there any fees associated with Urban Outfitters' 401(k) plan?
Yes, Urban Outfitters' 401(k) plan may have administrative fees and investment-related fees, which are disclosed in the plan documents.
How often can Urban Outfitters employees make changes to their investment allocations in the 401(k) plan?
Urban Outfitters employees can generally make changes to their investment allocations on a regular basis, often daily or monthly, depending on the plan provisions.
What happens to my Urban Outfitters 401(k) if I leave the company?
If you leave Urban Outfitters, you have several options for your 401(k), including rolling it over to another retirement account, leaving it with Urban Outfitters, or cashing it out (subject to taxes and penalties).
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