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Navigating Retirement: Annuities vs. IRA Withdrawals for Wolverine World Wide Employees

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There are just a couple of things almost all Wolverine World Wide 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 Wolverine World Wide 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 Wolverine World Wide retiree about 30 years of retirement income.

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

As life expectancies increase, Wolverine World Wide 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 Wolverine World Wide.

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 Wolverine World Wide?

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

How does Wolverine World Wide match employee contributions to the 401(k) plan?

Wolverine World Wide offers a matching contribution to the 401(k) plan, typically matching a percentage of the employee's contributions, up to a certain limit.

When can employees at Wolverine World Wide enroll in the 401(k) plan?

Employees at Wolverine World Wide can enroll in the 401(k) plan during their initial onboarding or during the annual open enrollment period.

What investment options are available in the Wolverine World Wide 401(k) plan?

The Wolverine World Wide 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

Is there a vesting schedule for the matching contributions at Wolverine World Wide?

Yes, Wolverine World Wide has a vesting schedule for matching contributions, meaning employees must work for a certain period before they fully own the employer's contributions.

Can employees at Wolverine World Wide take loans against their 401(k) savings?

Yes, Wolverine World Wide allows employees to take loans against their 401(k) savings, subject to specific terms and conditions outlined in the plan.

What happens to the 401(k) plan if an employee leaves Wolverine World Wide?

If an employee leaves Wolverine World Wide, they can choose to roll over their 401(k) balance to a new employer's plan, an IRA, or take a distribution, subject to taxes and penalties.

How can employees at Wolverine World Wide access their 401(k) account information?

Employees at Wolverine World Wide can access their 401(k) account information through the company’s benefits portal or by contacting the plan administrator.

Are there any fees associated with the Wolverine World Wide 401(k) plan?

Yes, there may be administrative and investment fees associated with the Wolverine World Wide 401(k) plan, which are disclosed in the plan documents.

What is the minimum contribution rate for the 401(k) plan at Wolverine World Wide?

The minimum contribution rate for the 401(k) plan at Wolverine World Wide is typically set at 1% of the employee's salary, though employees are encouraged to contribute more.