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Navigating Retirement: Annuities vs. IRA Withdrawals for Jacobs Engineering Group Employees

There are just a couple of things almost all Jacobs Engineering Group 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 Jacobs Engineering Group 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 Jacobs Engineering Group retiree about 30 years of retirement income.

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

As life expectancies increase, Jacobs Engineering Group 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 Jacobs Engineering Group.

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 type of retirement savings plan does Jacobs Engineering Group offer?

Jacobs Engineering Group offers a 401(k) retirement savings plan to help employees save for their future.

Is participation in the 401(k) plan at Jacobs Engineering Group mandatory?

No, participation in the 401(k) plan at Jacobs Engineering Group is voluntary; employees can choose whether or not to enroll.

What is the minimum age requirement to participate in Jacobs Engineering Group's 401(k) plan?

Employees must be at least 21 years old to participate in Jacobs Engineering Group's 401(k) plan.

Does Jacobs Engineering Group offer any matching contributions to the 401(k) plan?

Yes, Jacobs Engineering Group offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

What is the vesting schedule for the matching contributions at Jacobs Engineering Group?

The vesting schedule for matching contributions at Jacobs Engineering Group typically follows a graded schedule over several years, allowing employees to earn ownership of those contributions over time.

Can employees of Jacobs Engineering Group choose how their 401(k) contributions are invested?

Yes, employees of Jacobs Engineering Group can choose from a variety of investment options for their 401(k) contributions, including mutual funds and target-date funds.

What is the contribution limit for the 401(k) plan at Jacobs Engineering Group?

The contribution limit for the 401(k) plan at Jacobs Engineering Group is set by the IRS and may change annually. Employees should check the current limits for the specific year.

Does Jacobs Engineering Group allow employees to take loans against their 401(k) savings?

Yes, Jacobs Engineering Group allows employees to take loans against their 401(k) savings, subject to certain terms and conditions.

What happens to my 401(k) account if I leave Jacobs Engineering Group?

If you leave Jacobs Engineering Group, you have several options for your 401(k) account, including rolling it over to another qualified plan, cashing it out, or leaving it with Jacobs Engineering Group.

How can I access my 401(k) account information at Jacobs Engineering Group?

Employees can access their 401(k) account information through the designated online portal or by contacting the plan administrator at Jacobs Engineering Group.

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

Name of Pension Plan: Jacobs Engineering Group does not seem to have a traditional defined benefit pension plan. Instead, they provide a 401(k) plan with matching contributions. Years of Service and Age Qualification: Generally, Jacobs Engineering Group’s retirement benefits are based on the 401(k) plan, which does not have specific age or years of service requirements for vesting. Employees are eligible to participate in the 401(k) plan regardless of their years of service or age. Pension Formula: As Jacobs Engineering Group primarily offers a 401(k) plan rather than a defined benefit pension plan, there is no traditional pension formula applicable. Name of 401(k) Plan: Jacobs Engineering Group 401(k) Plan Eligibility: Employees are eligible to participate in the Jacobs Engineering Group 401(k) plan upon hire. Matching Contributions: Jacobs Engineering Group provides matching contributions to employees' 401(k) accounts. The exact matching formula and contribution limits can be found in the company’s benefits documentation.

Jacobs Engineering Group Announces Workforce Reduction (January 2024): Jacobs Engineering Group has announced a reduction in its workforce as part of a broader restructuring effort to streamline operations and enhance efficiency. The company cited a need to align its resources with evolving market conditions and strategic priorities. This reduction impacts various departments and is part of a larger trend of restructuring seen across the industry. Addressing this news is crucial due to the current economic climate, which is marked by uncertainty and a shifting investment landscape. Understanding these changes can help stakeholders navigate their financial and career planning effectively.

Jacobs Engineering Group (Jacobs) offers stock options and RSUs to its employees. The stock options typically include Company Stock Option Plans (CSOP) and RSUs under the Jacobs RSU Plan. These benefits are available to senior management and key employees.

Health Insurance: Jacobs offers comprehensive health insurance plans, including medical, dental, and vision coverage. Retirement Plans: 401(k) plans with company match, pension plans. Paid Time Off: Includes vacation days, sick leave, and personal days. Other Benefits: Employee Assistance Program (EAP), wellness programs, and flexible work arrangements.