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Navigating Retirement: Annuities vs. IRA Withdrawals for Elanco Animal Health Employees

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There are just a couple of things almost all Elanco Animal Health 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 Elanco Animal Health 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 Elanco Animal Health retiree about 30 years of retirement income.

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

As life expectancies increase, Elanco Animal Health 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 Elanco Animal Health.

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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What is the 401(k) plan offered by Elanco Animal Health?

The 401(k) plan at Elanco Animal Health is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.

Does Elanco Animal Health offer matching contributions to the 401(k) plan?

Yes, Elanco Animal Health offers matching contributions to the 401(k) plan, which helps employees maximize their retirement savings.

How can employees enroll in the 401(k) plan at Elanco Animal Health?

Employees can enroll in the 401(k) plan at Elanco Animal Health through the company’s benefits portal during the enrollment period or after a qualifying event.

What are the eligibility requirements for the 401(k) plan at Elanco Animal Health?

To be eligible for the 401(k) plan at Elanco Animal Health, employees typically need to meet certain criteria, such as age and length of service.

Can employees take loans against their 401(k) at Elanco Animal Health?

Yes, Elanco Animal Health allows employees to take loans against their 401(k) balance under certain conditions.

What investment options are available in the Elanco Animal Health 401(k) plan?

The 401(k) plan at Elanco Animal Health offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to customize their investment strategy.

How often can employees change their contribution percentage to the Elanco Animal Health 401(k) plan?

Employees at Elanco Animal Health can change their contribution percentage to the 401(k) plan at any time, subject to company policies.

Is there a vesting schedule for the matching contributions at Elanco Animal Health?

Yes, Elanco Animal Health has a vesting schedule for matching contributions, which means employees must work for the company for a certain period before they fully own the matching funds.

What happens to an employee's 401(k) account if they leave Elanco Animal Health?

If an employee leaves Elanco Animal Health, they can choose to roll over their 401(k) balance to another retirement account, cash out, or leave it in the Elanco plan if eligible.

Are there any fees associated with the Elanco Animal Health 401(k) plan?

Yes, there may be administrative fees associated with the Elanco Animal Health 401(k) plan, which are disclosed in the plan documents.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Pension Plan: Elanco's pension plan is structured as a defined benefit plan, meaning that employees receive a guaranteed payout upon retirement. The exact benefits are calculated based on years of service, age at retirement, and the average of the highest earnings during a specific period. Employees need to meet certain years of service and age qualifications to be eligible for this pension plan. The plan is aimed at long-term employees, ensuring that those who dedicate a significant portion of their career to Elanco are rewarded with secure retirement income. 401(k) Plan: Elanco offers a 401(k) plan to its employees, which is part of their broader retirement savings offerings. The plan allows employees to contribute a portion of their salary on a pre-tax basis, which Elanco matches up to a certain percentage, though the exact match percentage may vary each year. The plan is designed to provide flexibility and financial security, enabling employees to manage their retirement savings effectively. The company’s 401(k) plan is part of their commitment to employee well-being, emphasizing financial benefits as a key component of their compensation package.

Restructuring and Layoffs: In August 2023, Elanco Animal Health announced a restructuring plan aimed at improving operational efficiency. The company planned to lay off approximately 200 employees globally as part of this restructuring. This move is part of a broader effort to streamline operations and focus on core business areas. It's crucial to stay updated on this news due to the current economic environment, which impacts job security and corporate strategies. Understanding these changes helps employees and investors navigate the shifting landscape effectively.

Elanco Animal Health offers stock options and RSUs to its employees as part of its compensation and incentive programs. In 2022, the company provided stock options and RSUs to its senior executives and key employees. For 2023 and 2024, Elanco Animal Health has continued this practice, with a focus on aligning incentives with the company's performance.

Review Elanco Animal Health's official website for their health benefits information, including any recent updates or changes for 2022, 2023, or 2024. Reliable Sources: Look for specific terms and acronyms used by Elanco in their health benefits information, such as types of health plans, coverage details, and any new initiatives.

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For more information you can reach the plan administrator for Elanco Animal Health at 2500 Innovation Way Greenfield, IN 46140; or by calling them at (877) 352-6261.

https://www.thelayoff.com/ https://benefitslink.com/ https://www.federalregister.gov/ https://www.benefitspro.com/?slreturn=2024081195633 https://www.businessinsider.com/ https://www.elanco.com/en-us https://www.sec.gov/ https://pensionrights.org/ https://www.fidelity.com/ https://www.microsoft.com/en-us/benefits