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There are just a couple of things almost all United Airlines 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 United Airlines 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 United Airlines Holdings retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective United Airlines Holdings retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, United Airlines 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 United Airlines 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 United Airlines Holdings offer to its employees?
United Airlines Holdings offers a 401(k) retirement savings plan to its employees.
How can employees of United Airlines Holdings enroll in the 401(k) plan?
Employees of United Airlines Holdings can enroll in the 401(k) plan through the company's benefits portal during the enrollment period.
Does United Airlines Holdings provide a matching contribution for its 401(k) plan?
Yes, United Airlines Holdings offers a matching contribution to employees who participate in the 401(k) plan, subject to certain conditions.
What is the maximum contribution limit for the 401(k) plan at United Airlines Holdings?
The maximum contribution limit for the 401(k) plan at United Airlines Holdings is in accordance with IRS guidelines, which can change annually.
Can employees of United Airlines Holdings take loans against their 401(k) savings?
Yes, employees of United Airlines Holdings may have the option to take loans against their 401(k) savings, subject to the plan's terms and conditions.
Are there any penalties for early withdrawal from the United Airlines Holdings 401(k) plan?
Yes, early withdrawals from the United Airlines Holdings 401(k) plan may incur penalties and taxes, as per IRS regulations.
How often can employees of United Airlines Holdings change their contribution amounts to the 401(k) plan?
Employees of United Airlines Holdings can typically change their contribution amounts at any time, subject to the plan's rules.
What investment options are available in the United Airlines Holdings 401(k) plan?
The United Airlines Holdings 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds.
Is there a vesting schedule for the employer match in the United Airlines Holdings 401(k) plan?
Yes, there is a vesting schedule for the employer match in the United Airlines Holdings 401(k) plan, which determines when employees fully own the matching contributions.
Can employees of United Airlines Holdings roll over their 401(k) savings from a previous employer?
Yes, employees of United Airlines Holdings can roll over their 401(k) savings from a previous employer into the United Airlines Holdings 401(k) plan.
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