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There are just a couple of things almost all Spectrum Brands Holdings 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 Spectrum Brands Holdings 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 Spectrum Brands Holdings retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Spectrum Brands Holdings retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Spectrum Brands Holdings 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 Spectrum Brands Holdings.
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 Spectrum Brands Holdings offer to its employees?
Spectrum Brands Holdings offers a 401(k) retirement savings plan to help employees save for their future.
Does Spectrum Brands Holdings provide any matching contributions to the 401(k) plan?
Yes, Spectrum Brands Holdings provides a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.
What is the eligibility requirement to participate in the 401(k) plan at Spectrum Brands Holdings?
Employees of Spectrum Brands Holdings are typically eligible to participate in the 401(k) plan after completing a specified period of service.
Can employees of Spectrum Brands Holdings choose how much to contribute to their 401(k) accounts?
Yes, employees of Spectrum Brands Holdings can choose to contribute a percentage of their salary to their 401(k) accounts, within the limits set by the IRS.
What investment options are available in the Spectrum Brands Holdings 401(k) plan?
The 401(k) plan at Spectrum Brands Holdings offers a variety of investment options, including mutual funds and target-date funds.
Is there a vesting schedule for the matching contributions at Spectrum Brands Holdings?
Yes, Spectrum Brands Holdings has a vesting schedule for matching contributions, which means employees must work for a certain period before they fully own the employer's contributions.
How can employees of Spectrum Brands Holdings access their 401(k) account information?
Employees can access their 401(k) account information through the online portal provided by the plan administrator of Spectrum Brands Holdings.
What happens to the 401(k) plan if an employee leaves Spectrum Brands Holdings?
If an employee leaves Spectrum Brands Holdings, they can choose to roll over their 401(k) balance to another retirement account or leave it in the Spectrum Brands Holdings plan, subject to certain conditions.
Are there any fees associated with the 401(k) plan at Spectrum Brands Holdings?
Yes, there may be fees associated with the 401(k) plan at Spectrum Brands Holdings, which can include administrative fees and investment management fees.
Can employees take loans against their 401(k) balances at Spectrum Brands Holdings?
Yes, employees of Spectrum Brands Holdings may have the option to take loans against their 401(k) balances, subject to the plan's rules.
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