Navigating Retirement: Annuities vs. IRA Withdrawals for Calumet Specialty Products Partners Employees

Healthcare Provider Update: Healthcare Provider for Calumet Specialty Products Partners Calumet Specialty Products Partners typically offers health insurance through major national providers including UnitedHealthcare and Anthem Blue Cross Blue Shield. They provide a range of health plans designed to meet the needs of their employees, including options that align with the Affordable Care Act (ACA) guidelines. Brief Overview of Potential Healthcare Cost Increases in 2026 As Calumet Specialty Products Partners faces potential healthcare cost increases in 2026, employees may encounter significant challenges stemming from the anticipated hikes in ACA premiums. With projections indicating national average increases of around 18%-and in some states, jumps exceeding 60%-the convergence of expiring federal subsidies and rising medical costs could lead to out-of-pocket premium costs escalating by as much as 75% for many. Key factors driving these increases include ongoing inflation in medical services, high-cost specialty drugs, and the broader impacts of regulatory changes that are set to reshape the healthcare landscape. As a result, proactive financial planning will be essential for those wishing to mitigate the impact of these rising costs. Click here to learn more

There are just a couple of things almost all Calumet Specialty Products Partners 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 Calumet Specialty Products Partners 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 Calumet Specialty Products Partners retiree about 30 years of retirement income.

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

As life expectancies increase, Calumet Specialty Products Partners 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 Calumet Specialty Products Partners. 

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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