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Navigating Retirement: Annuities vs. IRA Withdrawals for Tri Pointe Homes Employees

There are just a couple of things almost all Tri Pointe Homes 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 Tri Pointe Homes 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 Tri Pointe Homes retiree about 30 years of retirement income.

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

As life expectancies increase, Tri Pointe Homes 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 Tri Pointe Homes.

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 plan does Tri Pointe Homes offer to its employees?

Tri Pointe Homes offers a 401(k) retirement savings plan to help employees save for their future.

How can employees of Tri Pointe Homes enroll in the 401(k) plan?

Employees of Tri Pointe Homes can enroll in the 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.

Does Tri Pointe Homes provide a matching contribution for the 401(k) plan?

Yes, Tri Pointe Homes offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

What is the vesting schedule for the 401(k) match at Tri Pointe Homes?

The vesting schedule for the 401(k) match at Tri Pointe Homes typically follows a standard timeline, which employees can review in the plan documents provided by HR.

Can employees of Tri Pointe Homes take loans against their 401(k) savings?

Yes, employees of Tri Pointe Homes may have the option to take loans against their 401(k) savings, subject to the terms and conditions of the plan.

What investment options are available in the Tri Pointe Homes 401(k) plan?

The Tri Pointe Homes 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

How often can employees of Tri Pointe Homes change their 401(k) contributions?

Employees of Tri Pointe Homes can change their 401(k) contribution amounts at any time, subject to the plan’s guidelines.

Is there a minimum contribution requirement for the 401(k) plan at Tri Pointe Homes?

Yes, Tri Pointe Homes may have a minimum contribution requirement for the 401(k) plan, which employees should verify in the plan documents.

What is the eligibility criteria for participating in the 401(k) plan at Tri Pointe Homes?

Employees of Tri Pointe Homes typically become eligible to participate in the 401(k) plan after completing a certain period of service, as outlined in the plan details.

How can employees access their 401(k) account information at Tri Pointe Homes?

Employees can access their 401(k) account information through the online portal provided by the plan administrator or by contacting the HR department at Tri Pointe Homes.