Navigating Retirement: Annuities vs. IRA Withdrawals for WEC Energy Group Employees

Healthcare Provider Update: WEC Energy Group's healthcare provider is the Retirement Group, a division of Wealth Enhancement Group, which assists employees with navigating complex benefit structures and potential healthcare challenges. In 2026, employees at WEC Energy Group may face significant healthcare cost increases due to projected premium hikes in the ACA marketplace, influenced by the expiration of enhanced federal subsidies, rising medical costs, and the push from insurers seeking higher premiums. As a result, many employees might see a steep rise in out-of-pocket expenses, with some forecasts suggesting increases could exceed 75%. To navigate these financial pressures, employees are encouraged to familiarize themselves with upcoming benefit changes and strategically review their healthcare options. Click here to learn more

There are just a couple of things almost all WEC Energy Group 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 WEC Energy Group 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 WEC Energy Group retiree about 30 years of retirement income.

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

As life expectancies increase, WEC Energy Group 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 WEC Energy Group. 

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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