There are just a couple of things almost all Delta Air Lines 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 Delta Air Lines 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 Delta Air Lines retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Delta Air Lines retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Delta Air Lines 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 Delta Air Lines.
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.
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
What is the 401(k) plan offered by Delta Air Lines?
The 401(k) plan offered by Delta Air Lines is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out, helping them prepare for retirement.
How does Delta Air Lines match employee contributions to the 401(k) plan?
Delta Air Lines offers a matching contribution to the 401(k) plan, which typically matches a percentage of the employee's contributions, up to a certain limit.
What are the eligibility requirements to participate in Delta Air Lines' 401(k) plan?
Employees of Delta Air Lines are eligible to participate in the 401(k) plan after completing a specific period of service, which is outlined in the plan details.
Can Delta Air Lines employees change their contribution rates to the 401(k) plan?
Yes, employees at Delta Air Lines can change their contribution rates to the 401(k) plan at any time, subject to the plan's guidelines.
What investment options are available in Delta Air Lines' 401(k) plan?
Delta Air Lines provides a variety of investment options in its 401(k) plan, including mutual funds, target-date funds, and other investment vehicles.
Is there a vesting schedule for the employer match in Delta Air Lines' 401(k) plan?
Yes, Delta Air Lines has a vesting schedule for the employer match, meaning that employees must work for a certain period before they fully own the matched contributions.
How can Delta Air Lines employees access their 401(k) account information?
Delta Air Lines employees can access their 401(k) account information through the company's benefits portal or by contacting the plan administrator.
What happens to my Delta Air Lines 401(k) if I leave the company?
If you leave Delta Air Lines, you have several options for your 401(k), including rolling it over to another retirement account, leaving it with Delta, or cashing it out, subject to taxes and penalties.
Are there loans available against my 401(k) at Delta Air Lines?
Yes, Delta Air Lines allows employees to take loans against their 401(k) balance, subject to the terms and conditions set forth in the plan.
How often can I change my investment allocations in Delta Air Lines' 401(k) plan?
Employees at Delta Air Lines can change their investment allocations in the 401(k) plan as often as they like, following the plan's guidelines.
-2.png?width=300&height=200&name=office-builing-main-lobby%20(52)-2.png)
.webp?width=300&height=200&name=office-builing-main-lobby%20(27).webp)
-2.png)
.webp)