Navigating Retirement: Annuities vs. IRA Withdrawals for Cleveland-Cliffs Employees

Healthcare Provider Update: Healthcare Provider for Cleveland-Cliffs Cleveland-Cliffs partners with Cleveland Clinic as its healthcare provider, offering a range of health services to its employees. This partnership is aimed at ensuring that employees receive quality medical care and support. Healthcare Cost Increases in 2026 As we approach 2026, Cleveland-Cliffs employees, especially those reliant on the Affordable Care Act (ACA) marketplace, may face significant healthcare cost challenges. With nationwide rate hikes projected to exceed 60% in some states, the removal of enhanced federal premium subsidies will further exacerbate this situation. More than 22 million marketplace enrollees could see their out-of-pocket premium costs rise by over 75%, driven by escalating medical expenses and insurer profit pressures. This sharp increase underscores the importance for employees to plan their healthcare budgets proactively to mitigate these potential financial burdens. Click here to learn more

There are just a couple of things almost all Cleveland-Cliffs 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 Cleveland-Cliffs 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 Cleveland-Cliffs retiree about 30 years of retirement income.

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

As life expectancies increase, Cleveland-Cliffs 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 Cleveland-Cliffs. 

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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