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Navigating Sequence Risk in Retirement: Lessons and Strategies for H.B. Fuller Employees

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'H.B. Fuller employees approaching retirement should recognize that the sequence of market returns in their early years can influence the longevity of their income far more than the average return itself, making disciplined withdrawal strategies and diversified income planning essential.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

'H.B. Fuller employees nearing retirement can benefit from understanding how market downturns early in retirement may have lasting effects, and from adopting flexible, research-based withdrawal and allocation strategies to help sustain their income over time.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

Historical examples of sequence-of-returns risk and their effects on retirement income.
Why the first years of retirement are most critical for portfolio sustainability.
Research‑backed strategies for managing sequence risk and supporting long‑term retirement goals.

Contributed by Paul Bergeron and Brent Wolf of Wealth Enhancement

For Fortune 500 employees approaching retirement, recognizing the timing of returns—not just the average return—can be critical to keeping income going over the long term. This concept, known as sequence-of‑returns risk, shows how poor early market performance in retirement can have a lasting impact on a withdrawal plan, even if long-term averages seem strong. Historical market data provides clear examples of this risk and offers practical methods for responding to it.

Historical examples of sequence risk

Fortune 500 retirees entering retirement during tough market cycles face situations similar to the declines seen in the late 1960s, when the market hit two bear markets (1968–70 and 1973–74) alongside high inflation. The S&P 500 dropped roughly 48% during the 1973–74 bear market, compounding inflation-related difficulties. ¹ Likewise, those retiring in 2000 endured two severe bear markets in the decade, while 2022 proved one of the toughest years for balanced portfolios, with sharp drops in both U.S. stocks and high-quality bonds.

Why the early years matter most

For a Fortune 500 retiree, significant losses in the first five to ten years of retirement—combined with regular withdrawals—can shrink the number of shares left to rebound when markets recover. Academic studies and industry research repeatedly show that even with the same average return, the order of gains and losses plays a huge role in retirement outcomes.

Research-backed strategies to manage sequence risk

One effective method for Fortune 500 retirees is keeping a mix of asset types to help weather downturns. Cash and bonds can act as “shock absorbers” for immediate expenses, reducing the need to sell stocks during market dips. Flexible withdrawal approaches—such as adjusting withdrawals within set guardrails—have been shown to support portfolio longevity better than fixed-dollar withdrawal methods.

Staging risk in a retirement portfolio—by holding one to two years of expenses in cash-like assets and several years in short‑ to intermediate‑term bonds—may give equities time to recover before they're tapped for income. For some Fortune 500 retirees, delaying income sources like Social Security can help raise total lifetime income and lessen the need to tap investments during volatile times. Thoughtful rebalancing and managing tax lots, especially during downturns, can also help maintain equity exposure and extend portfolio lifespan.

Implications for retirement planning

While higher stock allocations may offer greater long-term growth potential, they also increase sequence risk in early retirement for Fortune 500 workers. Historically, balanced portfolios—often with 30% to 50% equities for income-focused funds—have supported more resilient initial withdrawal rates compared to all-stock strategies. ² Strong early-market results can set up long-term success, but disciplined spending limits, guardrails, and rebalancing remain key.

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Sources:

1.The New York Times. ' What Happens When Stock Markets Become Bears ,' by William Davis, Karl Russell, and Stephen Gandel. 13 June 2022.

2. Vanguard UK. ' Sustainable Spending Rates in Turbulent Markets ,' by Daga, Ankul, et al. Mar. 2021, pp. 1–7.

Other Resources:

1. Guyton, Jonathan T., and William J. Klinger. “ Decision Rules and Maximum Initial Withdrawal Rates .” Journal of Financial Planning , vol. 19, no. 3, Mar. 2006, pp. 48–50, 52–54, 56–58. Financial Planning Association.

2. “ Timeline of U.S. Stock Market Crashes .” Investopedia , 30 Oct. 2024, section “The 1973–74 Oil Crisis Bear Market.”

3. ' When to Start Receiving Retirement Benefits. ' Social Security Administration, Pub. No. 05-10147, May 2024, pp. 1–2.

4. Arnott, Amy C., CFA, and Ivanna Hampton. “ Why More Diversification Doesn’t Mean Better Returns .” Morningstar , 7 June 2024.

What is the H.B. Fuller 401(k) Savings Plan?

The H.B. Fuller 401(k) Savings Plan is a retirement savings plan that allows employees to save and invest a portion of their paycheck for retirement.

How can I enroll in the H.B. Fuller 401(k) Savings Plan?

Employees can enroll in the H.B. Fuller 401(k) Savings Plan by completing the enrollment process through the company’s benefits portal or by contacting the HR department for assistance.

Does H.B. Fuller match employee contributions to the 401(k) Savings Plan?

Yes, H.B. Fuller offers a matching contribution to the 401(k) Savings Plan, which helps employees boost their retirement savings.

What is the maximum contribution I can make to the H.B. Fuller 401(k) Savings Plan?

The maximum contribution limit for the H.B. Fuller 401(k) Savings Plan is determined by the IRS and may change annually. Employees should check the latest IRS guidelines for the current limit.

When can I start contributing to the H.B. Fuller 401(k) Savings Plan?

Employees can start contributing to the H.B. Fuller 401(k) Savings Plan after they have completed the eligibility requirements set by the company.

How does H.B. Fuller’s matching contribution work?

H.B. Fuller typically matches a percentage of employee contributions up to a certain limit, which is outlined in the plan documents. Employees should refer to these documents for specific details.

Can I change my contribution amount to the H.B. Fuller 401(k) Savings Plan at any time?

Yes, employees can change their contribution amounts to the H.B. Fuller 401(k) Savings Plan at any time, subject to the plan’s guidelines.

What investment options are available in the H.B. Fuller 401(k) Savings Plan?

The H.B. Fuller 401(k) Savings Plan offers a range of investment options, including mutual funds and target-date funds, allowing employees to choose based on their risk tolerance and retirement goals.

Is there a vesting schedule for H.B. Fuller’s matching contributions?

Yes, H.B. Fuller has a vesting schedule for matching contributions, which means employees must work for a certain period before they fully own the employer contributions.

Can I take a loan from my H.B. Fuller 401(k) Savings Plan?

Yes, employees may have the option to take a loan from their H.B. Fuller 401(k) Savings Plan, subject to the plan’s terms and conditions.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Pension Plan: Name: H.B. Fuller Pension Plan Years of Service & Age Qualification: Employees typically qualify for the pension plan after 5 years of service and reaching age 65. Pension Formula: The pension is calculated based on years of service and final average salary. For example, it might be 1.5% of the final average salary multiplied by years of service. Specific Document: H.B. Fuller Annual Report, Page 45 (2023) 401(k) Plan: Name: H.B. Fuller 401(k) Plan Qualification: Employees are eligible to participate in the 401(k) plan immediately upon employment. The company may match contributions up to a certain percentage. Specific Document: H.B. Fuller Benefits Guide, Page 30 (2024)

In 2023, H.B. Fuller announced a major restructuring plan aimed at streamlining operations and improving profitability. This plan includes workforce reductions and the consolidation of certain business units. The restructuring is part of a broader strategy to adapt to the changing economic and market conditions. It is crucial for employees and stakeholders to stay informed about these changes due to the current economic volatility, which could affect job security and operational stability.

In 2022, H.B. Fuller offered stock options and RSUs to key executives and high-performing employees as part of their incentive plan. Specific acronyms for their programs include ESOP (Employee Stock Ownership Plan) and RSU (Restricted Stock Unit). Information can be found in the 2022 Proxy Statement, page 15.

Company Official Website: Look for health benefits information directly from H.B. Fuller's official website. HR/Employee Benefits Portals: Check platforms that aggregate employee benefits information for H.B. Fuller. News Websites: Search for recent news articles that discuss changes in H.B. Fuller's healthcare benefits. Financial/Business News Sites: Look for financial news that might include information on employee benefits. Industry-Specific Sites: Examine sources related to H.B. Fuller’s industry that might provide insights on employee benefits trends. Health Benefits Information for H.B. Fuller 1. Company Official Website H.B. Fuller Official Site: On H.B. Fuller's official website, the company offers a comprehensive overview of their employee benefits. Their health benefits typically include medical, dental, and vision coverage, along with wellness programs. Details on specific plans, coverage levels, and employee contributions are provided in their benefits guide or employee handbook, usually accessible through their HR portal or career section. 2. HR/Employee Benefits Portals Glassdoor: Glassdoor provides employee reviews and benefits summaries. For H.B. Fuller, employees have reported a range of health benefits, including standard medical, dental, and vision plans, with some mention of wellness incentives. Indeed: Similar to Glassdoor, Indeed offers reviews that sometimes include benefits details. For H.B. Fuller, the benefits are described as competitive with options for various healthcare plans. 3. News Websites Reuters / Bloomberg: These financial news sources sometimes report on major changes or updates in employee benefits, especially if H.B. Fuller has made recent changes or faced related news. Forbes / Business Insider: Such sources may cover broader industry trends that could affect H.B. Fuller's benefits or reveal specific company changes. 4. Financial/Business News Sites Yahoo Finance: Provides financial insights and may report on changes in company benefits related to financial health or restructuring. MarketWatch: Similar to Yahoo Finance, MarketWatch may provide updates on employee benefits in the context of corporate performance. 5. Industry-Specific Sites Chemical & Engineering News (C&EN): Since H.B. Fuller is a chemical company, industry-specific sites like C&EN might report on trends or changes in employee benefits within the industry. American Chemical Society (ACS): Provides news and updates related to companies in the chemical sector, which may include employee benefits trends.