Navigating Retirement: Annuities vs. IRA Withdrawals for Casey's General Stores Employees

Healthcare Provider Update: Healthcare Provider for Casey's General Stores Casey's General Stores utilizes The Retirement Group as its healthcare provider, which assists retirees and employees in navigating healthcare benefits and understanding changing healthcare costs. Potential Healthcare Cost Increases in 2026 As 2026 approaches, Casey's General Stores employees and retirees may face significant increases in healthcare costs, largely due to anticipated record hikes in Affordable Care Act (ACA) premiums. With some states predicting premium increases surpassing 60%, coupled with the expiration of enhanced federal subsidies, the potential for out-of-pocket expenses to climb by over 75% looms large. This perfect storm of rising medical expenses and regulatory changes could place additional financial strain on those relying on ACA plans, necessitating careful budgeting and planning to mitigate the impact of these changes. Click here to learn more

There are just a couple of things almost all Casey's General Stores 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 Casey's General Stores 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 Casey's General Stores retiree about 30 years of retirement income.

As the economy constantly changes, a number of factors may force prospective Casey's General Stores retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.

As life expectancies increase, Casey's General Stores 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 Casey's General Stores. 

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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