Navigating Retirement: Annuities vs. IRA Withdrawals for Avis Budget Group Employees

Healthcare Provider Update: Healthcare Provider for Avis Budget Group Avis Budget Group employees primarily receive their health insurance through Elevance Health, Inc., which offers various plans designed to meet the needs of the workforce. Anticipated Healthcare Cost Increases in 2026 As we approach 2026, Avis Budget Group employees should prepare for potentially significant healthcare cost increases. With healthcare costs projected to rise sharply-driven by increased medical expenses and the possible expiration of enhanced ACA premium subsidies-workers may face greater out-of-pocket expenses. Reports suggest that over half of large employers plan to shift more healthcare costs onto employees, indicating that those at Avis Budget Group could see changes in benefit structures and increased deductibles. Proactive planning and understanding benefit changes will be crucial for workers seeking to mitigate the financial impact. Click here to learn more

There are just a couple of things almost all Avis Budget Group 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 Avis Budget Group 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 Avis Budget Group retiree about 30 years of retirement income.

As the economy constantly changes, a number of factors may force prospective Avis Budget Group retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.

As life expectancies increase, Avis Budget Group 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 Avis Budget Group. 

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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