New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?
Navigating Retirement: Annuities vs. IRA Withdrawals for Dentsply Sirona Employees
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Oil prices between $50 and $120 per barrel with 80% annualized volatility have created ripple effects throughout the economy over the past six months. Oil price volatility ripples through the broader economy by influencing inflation expectations, interest rates, and equity market valuations. For employees at Dentsply Sirona, energy sector holdings within retirement accounts, such as oil stocks in a 401(k), can experience significant price swings that affect portfolio allocation; if sold during downturns, realized losses or gains may create unexpected tax consequences. Retirement savings strategies at Dentsply Sirona should account for how energy price cycles influence inflation, interest rates, and market returns over the long horizons that retirement planning requires. Professional guidance can help you navigate the indirect effects of oil volatility on your retirement planning and ensure your strategy accounts for these dynamics.
There are just a couple of things almost all Dentsply Sirona 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 Dentsply Sirona 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 Dentsply Sirona retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Dentsply Sirona retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Dentsply Sirona 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 Dentsply Sirona.
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 Dentsply Sirona into retirement, understanding the company's benefit structure can help you make more informed decisions. According to publicly available information, Dentsply Sirona maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. Dentsply Sirona does not appear to offer a formal retiree healthcare program, making healthcare coverage planning an important consideration if you retire before age 65. Because the specifics of your pension formula, vesting schedule, and benefit eligibility depend on your individual employment history and plan documents, We encourage you to review your Summary Plan Description (SPD) or speak with Dentsply Sirona's HR or benefits team for the most current details.
What is the Dentsply Sirona 401(k) plan?
The Dentsply Sirona 401(k) plan 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 can Dentsply Sirona employees enroll in the 401(k) plan?
Dentsply Sirona employees can enroll in the 401(k) plan by completing the enrollment process through the company’s benefits portal or by contacting the HR department for assistance.
What is the company match for the Dentsply Sirona 401(k) plan?
Dentsply Sirona offers a company match for contributions made to the 401(k) plan, typically matching a percentage of employee contributions up to a certain limit.
When can Dentsply Sirona employees start contributing to the 401(k) plan?
Dentsply Sirona employees can start contributing to the 401(k) plan after completing their eligibility period, which is usually outlined in the employee handbook.
What investment options are available in the Dentsply Sirona 401(k) plan?
The Dentsply Sirona 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees grow their savings.
Are there any fees associated with the Dentsply Sirona 401(k) plan?
Yes, there may be administrative fees and fund management fees associated with the Dentsply Sirona 401(k) plan, which are typically disclosed in the plan documents.
Can Dentsply Sirona employees take loans against their 401(k) savings?
Yes, Dentsply Sirona employees may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.
What happens to my Dentsply Sirona 401(k) if I leave the company?
If you leave Dentsply Sirona, you can choose to roll over your 401(k) balance to another retirement account, cash out your balance, or leave it in the Dentsply Sirona plan if allowed.
How often can Dentsply Sirona employees change their contribution amount?
Dentsply Sirona employees can typically change their contribution amount at any time, subject to the plan’s guidelines.
Is there a vesting schedule for the Dentsply Sirona 401(k) company match?
Yes, Dentsply Sirona has a vesting schedule for the company match, which means employees must work for a certain period before they fully own the matched funds.
For more information you can reach the plan administrator for Dentsply Sirona at 13320 Ballantyne Corporate Pl Charlotte, NC 28277; or by calling them at (844) 848-0137.
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