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Navigating Retirement: Annuities vs. IRA Withdrawals for Univision Communciations Employees

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

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

As life expectancies increase, Univision Communciations 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 Univision Communciations.

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 is the 401(k) plan offered by Univision Communications?

The 401(k) plan at Univision Communications is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.

How can I enroll in the 401(k) plan at Univision Communications?

Employees can enroll in the 401(k) plan at Univision Communications by completing the enrollment form available through the HR portal or by contacting the HR department for assistance.

Does Univision Communications offer a company match for the 401(k) contributions?

Yes, Univision Communications offers a company match for employee contributions to the 401(k) plan, subject to specific terms and conditions outlined in the plan documents.

What are the contribution limits for the 401(k) plan at Univision Communications?

The contribution limits for the 401(k) plan at Univision Communications follow the IRS guidelines, which may change annually. Employees should refer to the latest IRS announcements for current limits.

Can I change my contribution percentage for the 401(k) plan at Univision Communications?

Yes, employees can change their contribution percentage for the 401(k) plan at Univision Communications at any time by submitting a request through the HR portal.

What investment options are available in the Univision Communications 401(k) plan?

The 401(k) plan at Univision Communications offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles, allowing employees to choose based on their risk tolerance.

When can I access my 401(k) funds from Univision Communications?

Employees can access their 401(k) funds from Univision Communications upon reaching retirement age, or under certain circumstances such as financial hardship or termination of employment, subject to plan rules.

Is there a vesting schedule for the company match in the Univision Communications 401(k) plan?

Yes, Univision Communications has a vesting schedule for the company match, which determines how much of the employer contributions employees are entitled to based on their years of service.

What happens to my 401(k) plan if I leave Univision Communications?

If you leave Univision Communications, you have several options for your 401(k) plan, including rolling it over to another retirement account, leaving it with the plan, or cashing it out, subject to taxes and penalties.

Can I take a loan against my 401(k) at Univision Communications?

Yes, Univision Communications allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan documents.