New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?
Navigating Retirement: Annuities vs. IRA Withdrawals for MasTec Employees
Crude oil prices remain elevated and volatile, with annualized volatility around 80% and prices ranging between $50 and $120 per barrel over the past six months. Petroleum-based materials, heavy equipment diesel, and the mortgage rate inflation driven by energy costs create multiple layers of oil price exposure for construction and homebuilding. For MasTec employees building retirement savings, oil-driven inflation and market volatility make disciplined saving and diversified allocation more important, as energy cycles can disrupt both portfolio values and purchasing power. A financial advisor can help you build strategies that maintain progress toward retirement goals through periods of energy-driven economic turbulence.
There are just a couple of things almost all MasTec 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 MasTec 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 MasTec retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective MasTec retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, MasTec 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 MasTec.
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.
As you plan your transition from MasTec into retirement, understanding the company's benefit structure can help you make more informed decisions. According to publicly available information, MasTec maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. MasTec does not appear to offer a formal retiree healthcare program, making healthcare coverage planning an important consideration if you retire before age 65. Because the specifics of your pension formula, vesting schedule, and benefit eligibility depend on your individual employment history and plan documents, We encourage you to review your Summary Plan Description (SPD) or speak with MasTec's HR or benefits team for the most current details.
What type of retirement plan does MasTec offer to its employees?
MasTec offers a 401(k) retirement savings plan to help employees save for their future.
Does MasTec provide a company match for contributions made to the 401(k) plan?
Yes, MasTec provides a company match on employee contributions to the 401(k) plan, subject to specific limits.
At what age can MasTec employees start participating in the 401(k) plan?
MasTec employees can typically start participating in the 401(k) plan as soon as they meet eligibility requirements, usually upon hire.
What investment options are available in MasTec's 401(k) plan?
MasTec's 401(k) plan offers a variety of investment options, including mutual funds and target-date funds, to suit different risk tolerances.
How can MasTec employees enroll in the 401(k) plan?
MasTec employees can enroll in the 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.
Is there a minimum contribution amount required for MasTec's 401(k) plan?
MasTec may have a minimum contribution amount, which employees should verify in the plan documents or by contacting HR.
Can MasTec employees change their contribution percentage at any time?
Yes, MasTec employees can change their contribution percentage at any time, subject to the plan's rules and guidelines.
What happens to MasTec employees' 401(k) savings if they leave the company?
If MasTec employees leave the company, they can roll over their 401(k) savings to another retirement account or withdraw the funds, subject to tax implications.
Does MasTec offer loans against the 401(k) plan?
Yes, MasTec's 401(k) plan may allow employees to take loans against their savings, subject to specific terms and conditions.
Are there any fees associated with MasTec's 401(k) plan?
Yes, there may be administrative fees and investment-related fees associated with MasTec's 401(k) plan, which employees should review in the plan documents.
For more information you can reach the plan administrator for MasTec at , ; or by calling them at .
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