Navigating Retirement: Annuities vs. IRA Withdrawals for Expeditors Intl. of Washington Employees

Healthcare Provider Update: Healthcare Provider for Expeditors International of Washington Expeditors International of Washington primarily partners with major healthcare providers to offer employee health benefits. Typically, these include national insurers such as UnitedHealthcare, Anthem (Elevance Health), and Kaiser Permanente, among others. Employees are encouraged to choose plans that fit their specific healthcare needs. Potential Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are expected to surge significantly for employees of Expeditors International of Washington, largely driven by the anticipated expiration of enhanced premiums under the Affordable Care Act. Without these subsidies, many individuals could face premium increases exceeding 75%, impacting affordability and access to care. Coupled with rising medical costs and higher drug spending, these changes may create substantial financial burdens for employees and retirees alike, necessitating proactive budgeting and health planning. Click here to learn more

There are just a couple of things almost all Expeditors Intl. of Washington 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 Expeditors Intl. of Washington 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 Expeditors Intl. of Washington retiree about 30 years of retirement income.

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

As life expectancies increase, Expeditors Intl. of Washington 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 Expeditors Intl. of Washington. 

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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