There are just a couple of things almost all Henry Schein 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 Henry Schein 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 Henry Schein retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Henry Schein retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Henry Schein 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 Henry Schein.
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 purpose of the 401(k) plan offered by Henry Schein?
The purpose of the 401(k) plan offered by Henry Schein is to help employees save for retirement by allowing them to contribute a portion of their salary on a pre-tax basis.
How can employees enroll in the Henry Schein 401(k) plan?
Employees can enroll in the Henry Schein 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.
What types of contributions can employees make to the Henry Schein 401(k) plan?
Employees can make pre-tax contributions, Roth (after-tax) contributions, and potentially catch-up contributions if they are age 50 or older in the Henry Schein 401(k) plan.
Does Henry Schein offer any matching contributions to the 401(k) plan?
Yes, Henry Schein offers a matching contribution to the 401(k) plan, which helps employees boost their retirement savings.
What is the vesting schedule for the Henry Schein 401(k) matching contributions?
The vesting schedule for Henry Schein’s matching contributions typically follows a graded vesting schedule, which means employees earn ownership of the contributions over a specified period.
Can employees take loans against their 401(k) balance at Henry Schein?
Yes, employees may have the option to take loans against their 401(k) balance at Henry Schein, subject to the plan's terms and conditions.
What investment options are available in the Henry Schein 401(k) plan?
The Henry Schein 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock, allowing employees to diversify their portfolios.
How often can employees change their contribution amounts in the Henry Schein 401(k) plan?
Employees can typically change their contribution amounts in the Henry Schein 401(k) plan on a quarterly basis or as specified by the plan’s rules.
What happens to the 401(k) plan if an employee leaves Henry Schein?
If an employee leaves Henry Schein, they have several options for their 401(k) plan, including rolling it over to another retirement account, cashing it out (subject to taxes and penalties), or leaving it in the Henry Schein plan if allowed.
Are there any fees associated with the Henry Schein 401(k) plan?
Yes, there may be administrative fees and investment-related fees associated with the Henry Schein 401(k) plan, which are disclosed in the plan documents.
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