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Healthcare Provider Update: Healthcare Provider for Cummins Inc. Cummins Inc. primarily administers its employee health benefits through major insurance providers, including UnitedHealthcare and Anthem Blue Cross Blue Shield (BCBS), among others. Potential Healthcare Cost Increases in 2026 As Cummins Inc. anticipates significant healthcare cost increases in 2026, employees should prepare for potential spikes in premiums driven by a combination of factors. A projected rise of up to 8.5% in employer-sponsored insurance costs, alongside the potential expiration of enhanced ACA subsidies, may lead many employees to see their out-of-pocket expenses grow considerably. With certain states experiencing premium hikes exceeding 60%, comprehensive financial planning, including the strategic use of Health Savings Accounts (HSAs), will become essential for mitigating the anticipated financial impact on individuals and families. Click here to learn more
As Cummins Inc employees age and expectations of retirement change, Patrick Ray of the Retirement Group, a division of Wealth Enhancement Group, says proactively planning for a decades-long retirement is critical.
The article advises Cummins Inc employees to balance sustainable spending with diversified savings strategies, says Michael Corgiat, a representative of the Retirement Group, a division of Wealth Enhancement Group, about planning for an active, extended retirement.
In this article we will discuss:
1. Health and Longevity: The focus on monitoring key health metrics for a longer, active retirement and how people such as Jordi Visser are using technology and lifestyle changes to increase life expectancy and quality of life.
2. Investing Strategies for Extended Retirement: Strategies for Cummins Inc employees to manage their investment portfolios with an underlying biological age view.
3. Planning for Future Expenses and Lifestyle: How retirees can manage expenses such as healthcare and make sound decisions about where to live to support a comfortable and fulfilling later years.
Jordi Visser tracks his heart rate daily. He also monitors his breathing and sleep quality and eats lots of fruit and vegetables. And Visser, 56, does not do that because of poor health. Instead, he is looking forward.
His goal:
decades of active retirement. In 2011, 54% of retirees thought they would die younger than the average person their age and gender. Of these, only 31% reported a longer life expectancy than the population average.
A PlanAdviser article says 'The Society of Actuaries estimated that about 43% of retirees underestimate their life expectancy by at least five years,' says Kate Beattie, senior retirement income strategist with Capital Group in Los Angeles. And everyone except investors knows that Americans are living longer than ever before.
We are at the intersection of technology and longevity, 'Visser writes for a Barron's article. Cummins Inc employees might recall that the chief investment officer of Weiss Multi-Strategy Advisers also thinks that in the next decade, new medicines and technologies will enable Americans to live longer and healthier lives, according to the Barron's article. Tom Brady is a prime example of what was impossible, Visser said.
Brady, who just announced his retirement from football at age 45, is obviously in a class by himself. But Visser has made a point: The rest of us mortals might want to reconsider our assumptions about what is achievable in our senior years and in our investment strategy. Cummins Inc workers retiring should understand that a decades-long retirement requires a long-term portfolio. Also, controlling your expenses while enjoying retirement may require finding a delicate balance.
Maintaining Stocks
Those soon to be Cummins Inc retirees may find comfort in an old rule of thumb for retirement investing: Add your age to 100 to find out how much of your portfolio should be in stocks. Those who are 70 should put 30% of their portfolio in stocks.
If any healthy adult can live to 100, this rule seems hopelessly outdated. This 70-year-old must plan for the next 30 years - and that means remaining invested in equities to generate the growth needed to fight inflation.
But equities are the long-term engine your portfolio needs, says Pete Bush, advisor with Cetera Financial Group and co-founder of Horizon Financial Group in Baton Rouge in a Barron's article.
And people normally think, oh, I just hit retirement. I should be safe. They are considering retirement, not retirement itself, 'he says.'
Cummins Inc employees should ask why some 70-year-olds are as healthy as 50-year-olds. In light of that, Visser suggests investors look at your biological age, which is basically your health score that varies widely from your chronological age. Scientists are developing accurate ways to determine biological age. Some of the techniques sound fantastical - like analyzing saliva and blood. But Visser says there's one big takeaway for investors: Stay focused on the fundamentals. 'Your health should inform how you look at your portfolio,' she said.
The solution for Cummins Inc employees is finding the optimal asset allocation. Bush advises investors weigh growth versus value, noting that growth stocks have done well in the last decade but poorly in the last year. Eventually, international stocks may also outperform U.S. stocks - a contrast to the sector's performance over the past decade. This is partly because European and Asian stocks are generally cheaper than American stocks. Asset manager Vanguard expects higher 10-year annualized returns for developed markets outside the United States - 7.2% to 9.2% - than for U.S. markets - 4.7% to 6.2%.
A Barron's article by Captrust financial advisor Jeremy Altfeder says bonds can provide some income and security now that interest rates are higher. Take a client that spends USD 100,000 per year. We need a year's worth of necessities, therefore. We could hold USD 100,000 in Treasury bills.
Altfeder says it helps investors relax knowing they have enough money set aside - up to seven years' worth depending on the client. He says laddering out Treasuries and other instruments is predictable. If you hold the bonds to maturity, you know their yield.
Numerous financial advisors also suggest complicated strategies involving alternative investments, trusts and estate planning - depending on the individual's wealth, tax situation, desire to pass an inheritance to heirs or charity - and risk tolerance. So the aim is to keep this wealth, sometimes to the next generation.
A New Take on Work-Life Balance.
Cummins Inc employees should ask how a longer, healthier life creates incentives to work longer and postpone Social Security filings. This will ensure a larger monthly benefit when you claim later. Such actions may help you save more and give your portfolio time to grow before you start taking out money.
Two other ways for investors to save more to advance their retirement savings exist. For one thing, updated contribution limits set by the Internal Revenue Service allow investors to contribute up to USD 22,500 to their 401 (k), 403 (b), and other retirement plans by 2023 over the USD 20,500 limit previously set by the agency. Over 50 can save up to USD 7,500 more. New legislation will gradually raise the age of required minimum distributions - RMDs - from 72 to 75 - for investors planning a long retirement.
Cummins Inc employees should also remember they are not expected to stay or even work full time. Clients have reorganized their work so they are not racing to retire, said Chip Munn, advisor and chief executive officer of Signature Wealth Strategies in Florence, South Carolina. A Barron's article says he believes older workers offer 'value and leverage.' But your company might not have any formal plans for accommodating your desired schedule - you might just have to ask your employer, 'Hey, I don't want to retire but I'd like to work part time.'
Active lifestyle has its benefits too. Those who are most happy and healthiest work longer but less, he says.
Even for those who think they have enough saved up, early retirement is more risky than you might think. Cummins Inc employees should read about how Bank of America employee Cyndi Hutchins saw this firsthand. Her grandmother retired after 41 years of work at age 55.
At that point I started thinking differently about retirement, 'says Hutchins, director of financial gerontology with a bank's retirement research and insights group. We expected 10 to 15 years of retirement. We missed several factors. And she had a pension - a tiny pension - that did not last 41 years. Then her family was ultimately responsible for paying for her grandmother's living expenses.'
Between 1960 and 2015, the US life expectancy increased by nearly 10 years - from 69.7 to 79.4 years. The 2020 Census Bureau projects an additional 6.1 years of increase in average life expectancy between 2016 and 2060 - a record 85.6 years - according to the report. Cummins Inc employees should also note Americans are living longer than ever before. Almost a fifth of all Americans are over 65 years old.
A combination of soaring inflation and last year's weak stock and bond markets means no wonder more people fear running out of money in old age. This includes people with big savings. A 2022 survey of high-net-worth investors by Natixis Investment Managers found more than a third of millionaires believe retirement 'will take a miracle.'
Cummins Inc employees should understand how this anxiety is fueling increased demand for annuities - insurance contracts that promise a lifetime income. Frank Pare of PF Wealth Management has considered adding a single premium immediate annuity, or SPIA, to some clients' retirement plans. An SPIA involves an investor paying a lump sum to an insurance company that provides a lifetime income stream to the annuity owner. The payout on the annuity depends partly on the owner's age and gender.
There are exceptions, Pare says. Firstly, fees might be steep. In addition to stocks and bonds, you must keep some of your retirement money in these and other assets. You do not want to leave yourself short outside the SPIA, 'Pare says.'
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A third concern with annuities is inflation. And without an inflation rider, your purchasing power will be eroded if inflation picks up like it did last year, Pare says.
Cummins Inc employees considering an annuity should know it's just one tool among many. Pare says he does not believe in silver bullets.
Expense Management
Along with maximizing income, retirees of all wealth levels need to budget and avoid major new expenses that require maintenance in retirement - like a vacation home or new boat.
Cummins Inc employees should note how healthcare is the expense that retirees underestimate most - for healthy seniors who live long. A 2022 report by Fidelity Investments estimates a 65-year-old couple will spend on average USD 315,000 on medical expenses in retirement. This was up 5% from 2021 and almost doubled since 2002, when it was USD 160,000. In the first two decades of retirement a healthy lifestyle can help keep costs down but there are some things beyond our control. Consider opening a health savings account with tax benefits to save for future medical costs. If you can contribute to an HSA without using the money to pay for current healthcare costs, you can save for long-term care, 'Hutchins of Bank of America says.'
For Cummins Inc employees, where you live in retirement will affect your expenses - make the decision now. Some Americans move to warmer climates and cheaper living states. Consider whether your new community can handle your future medical needs and hobbies.
In retirement, most Americans never move or rarely move far. A survey by the 2021 AARP found that nearly three in four adults over age 50 intend to stay put in their current home for at least the next few years. If you stay healthy and active, you can stay in your current home, 'Hutchins tells Barron's. Ask yourself if your home is age-friendly, as you age. She says if you have no bathroom on the first floor you should budget for that renovation.
The Key to Contentment
Most importantly, advisors and healthcare professionals agree that having an active social life in retirement is key to happiness. Obligate a hobby if you do not already have one. Spend time with a charity. Serve food to friends.
It sounds trite to Cummins Inc employees. But it is very healthy. A longitudinal Study of more than eighty-five years of Adult Development following the same adults and their descendants has found that personal contact is important to longevity and physical and mental health.
Isolation and loneliness accelerate cognitive decline symptoms fastest, Bank of America's Hutchins says. Still interact with people and make sure your physical and emotional needs are met, 'he said.'
In retirement, Joseph Coughlin, director of the MIT AgeLab, says plan for your lunch companions. This influences the quality of your investment portfolio as well as your social portfolio. Have you friends? If you retire & move, can you find them? The friendship takes time, he says.
If you are going to live to be 100, you want close personal relationships and enough money to live comfortably.
Sources:
1. Horizon Financial Group . 'People tend to think, ‘Oh, I’m getting near retirement. I’d better play it safe.’' Horizon Financial Group, no publication date given. Accessed 27 Feb. 2025. Horizon Financial Group .
2. Vuink.com . 'You Could Live to 100. The Trick Is Not Running Out of Money.' Vuink.com, 17 Feb. 2023. Accessed 27 Feb. 2025. vuink.com .
3. Segal, Julie . 'How a Hedge Fund Is Moving Beyond Its Charismatic Founder.' Institutional Investor, 25 Jan. 2022. Accessed 27 Feb. 2025. Institutional Investor .
4. Morningstar . 'General Research Publications.' Morningstar, Inc., no specific publication date. Accessed 27 Feb. 2025. Morningstar .
5. Harvard Study of Adult Development . 'Research Publications.' Harvard University, ongoing since 1938. Accessed 27 Feb. 2025. Harvard Study .
How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.
Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.
What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.
Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.
In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.
Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.
How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.
Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.
What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.
Role of the Pension Benefit Guaranty Corporation (PBGC): The PBGC insures the pension benefits under the Cummins Plan, providing a safety net that enhances the reliability of these benefits. Employees covered by the plan can gain confidence in the security of their pensions, knowing that even in the face of potential plan termination, the PBGC guarantees the core benefits, subject to certain legal limits and conditions.
How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.
Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.
What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.
Procedures and Deadlines for Electing Pension Distribution: The Cummins Pension Plan outlines specific procedures and deadlines for electing a distribution upon retirement, emphasizing the importance of timely and informed decision-making. By understanding these processes, employees can avoid delays and ensure that they receive their pension benefits in the manner that best suits their post-retirement financial plans.
What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.
Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.
How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.
Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.
How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.
Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.
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