New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?
Navigating Retirement: Annuities vs. IRA Withdrawals for Benchmark Electronics Employees
/General/General%2010.png?width=1280&height=853&name=General%2010.png)
Oil market turbulence continues to ripple through the broader economy, with crude swinging between $50 and $120 per barrel and annualized volatility near 80%. Elevated oil prices contribute to inflationary pressure that affects interest rates, corporate borrowing costs, and equity market multiples across all sectors. For Benchmark Electronics employees, this means that retirement account performance, mortgage rates, and even the purchasing power of future pension income can all be influenced by sustained energy market volatility. Benchmark Electronics employees building long-term savings should recognize that oil-driven economic conditions can affect both the growth of their portfolios and the purchasing power of their eventual retirement income. A financial advisor can help you build strategies that maintain progress toward retirement goals through periods of energy-driven economic turbulence.
There are just a couple of things almost all Benchmark Electronics 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 Benchmark Electronics 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 Benchmark Electronics retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Benchmark Electronics retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Benchmark Electronics 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 Benchmark Electronics.
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.
As you plan your transition from Benchmark Electronics into retirement, understanding the company's benefit structure can help you make more informed decisions. According to publicly available information, Benchmark Electronics does not maintain a traditional defined benefit pension plan, making your 401(k) plan and personal savings the primary vehicles for retirement income. Benchmark Electronics does not appear to offer a formal retiree healthcare program, so healthcare coverage planning before Medicare eligibility at age 65 is an important consideration. We encourage you to review your Summary Plan Description (SPD) or speak with Benchmark Electronics's HR or benefits team for the most current details.
What is the 401(k) plan offered by Benchmark Electronics?
The 401(k) plan at Benchmark Electronics is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax basis, helping them prepare for retirement.
Does Benchmark Electronics match employee contributions to the 401(k) plan?
Yes, Benchmark Electronics offers a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.
How can I enroll in the Benchmark Electronics 401(k) plan?
Employees can enroll in the Benchmark Electronics 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
What are the eligibility requirements for the Benchmark Electronics 401(k) plan?
Employees of Benchmark Electronics are generally eligible to participate in the 401(k) plan after completing a specified period of service, as outlined in the plan documents.
Can I change my contribution rate to the Benchmark Electronics 401(k) plan?
Yes, employees can change their contribution rate to the Benchmark Electronics 401(k) plan at any time, subject to the plan's rules and limits.
What investment options are available in the Benchmark Electronics 401(k) plan?
The Benchmark Electronics 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.
Is there a vesting schedule for the employer match in the Benchmark Electronics 401(k) plan?
Yes, the employer match in the Benchmark Electronics 401(k) plan may be subject to a vesting schedule, which determines when employees fully own the matched contributions.
Can I take a loan from my Benchmark Electronics 401(k) plan?
Yes, employees may have the option to take a loan against their 401(k) balance in the Benchmark Electronics plan, subject to specific terms and conditions.
What happens to my Benchmark Electronics 401(k) if I leave the company?
If you leave Benchmark Electronics, you have several options for your 401(k) plan, including rolling it over to another retirement account, cashing it out, or leaving it with Benchmark Electronics.
Are there any fees associated with the Benchmark Electronics 401(k) plan?
Yes, the Benchmark Electronics 401(k) plan may have administrative fees and investment-related fees, which are disclosed in the plan documents.
For more information you can reach the plan administrator for Benchmark Electronics at 56 South Rockford Dr Tempe, AZ 85281; or by calling them at +1 480-967-2100.
Help shape our next stories
Choose the topics you’d love to read more about. Your input helps us focus on content that matters to you.