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Navigating Retirement: Annuities vs. IRA Withdrawals for Goodyear Tire & Rubber Employees

There are just a couple of things almost all Goodyear Tire & Rubber 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 Goodyear Tire & Rubber 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 Goodyear Tire & Rubber retiree about 30 years of retirement income.

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

As life expectancies increase, Goodyear Tire & Rubber 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 Goodyear Tire & Rubber.

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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Pension Plan Information: Goodyear's Form 10-K typically includes information about pension plans in the section discussing employee benefits and retirement plans. The page number might vary between reports. 401(k) Plan Information: This is also covered in the employee benefits section of the Form 10-K, describing the 401(k) plan details.

Restructuring and Layoffs: In 2023, Goodyear announced significant restructuring efforts, including layoffs aimed at reducing operational costs and streamlining their global operations. The company aimed to improve profitability amidst a challenging economic climate. This restructuring is part of Goodyear's broader strategy to adapt to the current economic environment, which includes shifting market demands and evolving industry standards.

Goodyear Tire & Rubber offers stock options and RSUs as part of their compensation package. Stock options typically grant employees the right to purchase shares at a set price in the future. RSUs are granted to employees with vesting conditions.

Goodyear Tire & Rubber: Health Benefits Information 1. Official Website Goodyear Tire & Rubber's Official Site: Check the "Careers" or "Employee Benefits" section for information on health benefits. 2. Employee Benefit Reviews Glassdoor: Look for employee reviews related to benefits and healthcare. Indeed: Search for employee reviews and benefits information. 3. News Articles Business Insider: Search for articles on Goodyear's employee health benefits and recent changes. Forbes: Look for recent news about Goodyear’s employee benefits and healthcare policies. 4. Industry Publications HR Magazine: Look for articles related to Goodyear’s healthcare benefits and any recent updates. Employee Benefit News: Check for articles about Goodyear's health benefits and any changes or trends. 5. Financial and Business News Reuters: Search for any recent business news affecting Goodyear’s health benefits. Bloomberg: Look for articles on Goodyear’s employee benefits and related financial impacts. Specific Healthcare-Related Terms and Acronyms HSA: Health Savings Account FSA: Flexible Spending Account PPO: Preferred Provider Organization HMO: Health Maintenance Organization EAP: Employee Assistance Program COBRA: Consolidated Omnibus Budget Reconciliation Act Recent Employee Healthcare News Look for recent changes or updates to Goodyear’s health insurance plans, any new benefits introduced, or alterations to existing plans.