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There are just a couple of things almost all Walt Disney 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 Walt Disney 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 Walt Disney retiree about 30 years of retirement income.
As the economy constantly changes, a number of factors may force prospective Walt Disney retirees to revisit the 4% rule. It may be worth considering annuities as an alternative.
As life expectancies increase, Walt Disney 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 Walt Disney.
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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- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
What is the 401(k) plan offered by Walt Disney?
The 401(k) plan offered by Walt Disney is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How can Walt Disney employees enroll in the 401(k) plan?
Walt Disney employees can enroll in the 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.
Does Walt Disney match employee contributions to the 401(k) plan?
Yes, Walt Disney offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the maximum contribution limit for the Walt Disney 401(k) plan?
The maximum contribution limit for the Walt Disney 401(k) plan is subject to IRS regulations, which may change annually.
When can Walt Disney employees start contributing to their 401(k) plan?
Walt Disney employees can start contributing to their 401(k) plan after completing a specified eligibility period, typically within their first year of employment.
Are there any fees associated with the Walt Disney 401(k) plan?
Yes, there may be administrative fees associated with the Walt Disney 401(k) plan, which are disclosed in the plan documents.
Can Walt Disney employees take loans against their 401(k) savings?
Yes, Walt Disney allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.
What investment options are available in the Walt Disney 401(k) plan?
The Walt Disney 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
How often can Walt Disney employees change their 401(k) contribution amount?
Walt Disney employees can change their 401(k) contribution amount at designated times throughout the year, typically during open enrollment or after a qualifying event.
What happens to the 401(k) savings if a Walt Disney employee leaves the company?
If a Walt Disney employee leaves the company, they can choose to roll over their 401(k) savings to another retirement account, cash out, or leave the funds in the Walt Disney plan if eligible.
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