Navigating Retirement: Annuities vs. IRA Withdrawals for Tenet Healthcare Employees

Healthcare Provider Update: Tenet Healthcare Overview Tenet Healthcare Corporation operates a network of healthcare services, primarily through its hospitals and outpatient facilities in the United States. It is recognized for offering a broad spectrum of services, including surgical, inpatient, and outpatient care. Potential Healthcare Cost Increases in 2026 Healthcare costs, particularly insurance premiums for Affordable Care Act (ACA) plans, are projected to rise significantly in 2026, potentially exceeding 60% in some states. This increase is driven by several factors, including rising medical costs and the anticipated loss of enhanced federal premium subsidies that have benefited many consumers. Without legislative action to extend these subsidies, a vast majority of ACA enrollees may face out-of-pocket premium hikes of over 75%, placing financial strain on individuals and families seeking adequate coverage in an increasingly challenging healthcare landscape. Click here to learn more

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

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

As life expectancies increase, Tenet Healthcare 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 Tenet Healthcare. 

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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