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There are just a couple of things almost all MKS Instruments 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 MKS Instruments 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 MKS Instruments retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective MKS Instruments retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, MKS Instruments 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 MKS Instruments.
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 401(k) plan offered by MKS Instruments?
The 401(k) plan at MKS Instruments is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How can I enroll in the MKS Instruments 401(k) plan?
You can enroll in the MKS Instruments 401(k) plan by completing the enrollment form available through the HR portal or by contacting the HR department for assistance.
Does MKS Instruments offer a company match for the 401(k) contributions?
Yes, MKS Instruments provides a company match for employee contributions to the 401(k) plan, subject to specific terms and conditions.
What is the maximum contribution limit for the MKS Instruments 401(k) plan?
The maximum contribution limit for the MKS Instruments 401(k) plan aligns with IRS guidelines, which are updated annually.
Can I change my contribution percentage for the MKS Instruments 401(k) plan?
Yes, employees can change their contribution percentage for the MKS Instruments 401(k) plan at any time by submitting a request through the HR portal.
What investment options are available in the MKS Instruments 401(k) plan?
The MKS Instruments 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.
When can I access my funds in the MKS Instruments 401(k) plan?
Employees can access their funds in the MKS Instruments 401(k) plan upon reaching retirement age, or under certain circumstances such as hardship withdrawals.
What happens to my MKS Instruments 401(k) plan if I leave the company?
If you leave MKS Instruments, you can either roll over your 401(k) balance to another retirement account or leave it in the MKS Instruments plan, subject to plan rules.
Does MKS Instruments allow loans against my 401(k) balance?
Yes, MKS Instruments may allow employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan.
Are there any fees associated with the MKS Instruments 401(k) plan?
Yes, there may be fees associated with managing the MKS Instruments 401(k) plan, which are typically disclosed in the plan documents.
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