Navigating Retirement: Annuities vs. IRA Withdrawals for Omnicom Group Employees

Healthcare Provider Update: Healthcare Provider for Omnicom Group Omnicom Group typically partners with a variety of healthcare insurance providers to cover the medical needs of its employees. Notably, companies like UnitedHealthcare and Cigna frequently feature among their offerings, but specific health plan details may vary based on employment terms, location, and specific employee needs. Healthcare Cost Increases for 2026 As we move towards 2026, significant healthcare cost increases are anticipated for employees at Omnicom Group, mirroring national trends. With the expiration of enhanced federal subsidies, many enrollees in the Affordable Care Act marketplace may see their premiums soar by over 75%. Specific states are bracing for steep rate hikes, some exceeding 60%, driven by escalating medical costs and aggressive rate adjustments from major insurers. This perfect storm of rising expenses adds financial pressure on families, especially those considering early retirement or facing high out-of-pocket healthcare costs. Click here to learn more

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

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

As life expectancies increase, Omnicom 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 Omnicom 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.

 

Articles you may find interesting: