Navigating Retirement: Annuities vs. IRA Withdrawals for Host Hotels & Resorts Employees

Healthcare Provider Update: Healthcare Provider for Host Hotels & Resorts: Host Hotels & Resorts offers healthcare benefits through various providers, with options that typically include major insurers like UnitedHealthcare, Anthem, and Kaiser Permanente. These plans often encompass a range of medical services, including telehealth, outpatient care, and pharmacy benefits. Potential Healthcare Cost Increases in 2026: As 2026 approaches, employees of Host Hotels & Resorts should brace for significant increases in healthcare costs. Experts predict that health insurance premiums for plans under the Affordable Care Act could soar, with some states facing hikes of over 60%. Factors driving these increases include the expiration of enhanced federal subsidies and escalating medical expenses, which are projected to rise by as much as 7% to 10%. Amidst these looming changes, employees are encouraged to actively review their benefit options early to mitigate potential financial impacts. Click here to learn more

There are just a couple of things almost all Host Hotels & Resorts 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 Host Hotels & Resorts 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 Host Hotels & Resorts retiree about 30 years of retirement income.

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

As life expectancies increase, Host Hotels & Resorts 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 Host Hotels & Resorts. 

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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