New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Navigating Sequence Risk in Retirement: Lessons and Strategies for Illumina Employees

Healthcare Provider Update: Healthcare Provider for Illumina Illumina, a leader in genomic sequencing technology, utilizes various healthcare providers for its insurance needs. While specific provider details are not universally captured, notable healthcare partners have included large insurers like UnitedHealthcare and Aetna, which typically offer comprehensive plans tailored to employees in the biotech and pharmaceutical sectors. Potential Healthcare Cost Increases in 2026 for Illumina As a result of anticipated increases in healthcare costs in 2026, Illumina employees may face significantly higher premiums due to a perfect storm of factors impacting the Affordable Care Act marketplaces. With some states projected to experience premium hikes upwards of 60%, and up to 92% of ACA marketplace enrollees potentially seeing increases in out-of-pocket costs exceeding 75% without the renewal of federal subsidies, Illumina's workforce will need to brace for substantial financial challenges. Coupled with rising medical cost inflation and aggressive rate increases from major insurers, these shifts will pose potential strains on employee healthcare budgets and require strategic planning to manage escalating expenses effectively. Click here to learn more

'Illumina 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.

'Illumina 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.

Featured Video

Articles you may find interesting:

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 401(k) plan offered by Illumina?

The 401(k) plan at Illumina is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out, helping them prepare for retirement.

How does Illumina match employee contributions to the 401(k) plan?

Illumina offers a matching contribution to the 401(k) plan, where the company matches a percentage of employee contributions up to a certain limit, enhancing employees' savings potential.

When can employees at Illumina start contributing to the 401(k) plan?

Employees at Illumina can begin contributing to the 401(k) plan after completing their initial eligibility period, which is typically outlined in the employee handbook.

Does Illumina offer a Roth 401(k) option?

Yes, Illumina provides a Roth 401(k) option, allowing employees to contribute after-tax dollars, which can grow tax-free for retirement.

What investment options are available in Illumina's 401(k) plan?

Illumina's 401(k) plan includes a variety of investment options, such as mutual funds, target-date funds, and other investment vehicles to help employees diversify their portfolios.

Is there a vesting schedule for Illumina's 401(k) matching contributions?

Yes, Illumina has a vesting schedule for matching contributions, which means that employees must work for a certain period to fully own the matched funds.

Can employees at Illumina take loans against their 401(k) savings?

Yes, Illumina allows employees to take loans against their 401(k) savings, subject to certain terms and conditions outlined in the plan documents.

What happens to the 401(k) plan if an employee leaves Illumina?

If an employee leaves Illumina, they have several options for their 401(k) plan, including rolling it over to another retirement account, leaving it with Illumina, or cashing it out.

How often can employees at Illumina change their 401(k) contribution amounts?

Employees at Illumina can change their 401(k) contribution amounts during designated enrollment periods or as permitted by the plan, typically on a quarterly basis.

Does Illumina provide educational resources about the 401(k) plan?

Yes, Illumina offers educational resources and workshops to help employees understand their 401(k) plan options and make informed investment decisions.

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

Name of Pension Plan: Illumina Retirement Plan Years of Service and Age Qualification: Employees are eligible for pension benefits if they have at least 5 years of service and are at least 55 years old. Pension Formula: The formula typically involves a combination of years of service and average salary. Exact details may vary based on individual circumstances. Plan Documentation: 401(k) Plan Name of 401(k) Plan: Illumina 401(k) Savings Plan Eligibility: All employees who meet the minimum service requirement, typically 30 days of employment. Plan Contributions: Employees can contribute up to the annual IRS limit, with potential matching contributions from Illumina.

Illumina announced a restructuring plan in early 2024, which includes significant layoffs and a shift in its business strategy. The company is reducing its workforce by approximately 8% to streamline operations and focus on core business areas. This decision follows a period of slower-than-expected growth and increasing pressure on its financial performance. The restructuring is part of Illumina’s effort to cut costs and improve profitability amidst a challenging economic environment.

Stock Options: Illumina offers stock options as part of its employee compensation package. The stock options are generally available to senior executives and key employees, with grants typically made based on performance and tenure. RSUs: Restricted Stock Units (RSUs) at Illumina are provided to a broader range of employees, including those at various levels of management. RSUs usually vest over a period of time, rewarding employees for their continued service and performance

Health Benefits Overview: Illumina offers a comprehensive benefits package that includes medical, dental, and vision coverage. Employees have access to various health plans, including HMO and PPO options. The company also provides mental health support through an Employee Assistance Program (EAP) and wellness resources.