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

New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?

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

August 27, 2025

How Oil Volatility Affects Your loanDepot Retirement

Energy market instability persists, with crude prices fluctuating between $50 and $120 per barrel and annualized volatility running around 80%. The effects reach well beyond the energy sector. Energy-sector lending exposure, investment portfolio concentrations, and the broader macro channel of inflation and interest rates connect financial institutions to oil market volatility. loanDepot employees building long-term savings should recognize that oil-driven economic conditions can affect both the growth of their portfolios and the purchasing power of their eventual retirement income. Working with a financial advisor can help you position your planning strategy for sustained energy price uncertainty.

'loanDepot 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.

'loanDepot 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.
Researchâ€‘backed strategies for managing sequence risk and supporting longâ€‘term retirement goals.

Contributed by Paul Bergeron and Brent Wolf of Wealth Enhancement

For Fortuneâ€¯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-ofâ€‘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

Fortuneâ€¯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&Pâ€¯500 dropped roughly 48% during the 1973-74 bear market, compounding inflation-related difficulties. ¹ Likewise, those retiring 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 Fortuneâ€¯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 Fortuneâ€¯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 shortâ€‘ to intermediateâ€‘term bonds, may give equities time to recover before they're tapped for income. For some Fortuneâ€¯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 Fortuneâ€¯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.

As you plan your transition from loanDepot into retirement, understanding the company's benefit structure can help you make more informed decisions. According to publicly available information, loanDepot does not maintain a traditional defined benefit pension plan, making your 401(k) plan and personal savings the primary vehicles for retirement income. loanDepot does not appear to offer a formal retiree healthcare program, so healthcare coverage planning before Medicare eligibility at age 65 is an important consideration. We encourage you to review your Summary Plan Description (SPD) or speak with loanDepot's HR or benefits team for the most current details.

Sources:

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

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 type of retirement plan does loanDepot offer to its employees?

loanDepot offers a 401(k) retirement plan to help employees save for their future.

Does loanDepot match employee contributions to the 401(k) plan?

Yes, loanDepot provides a matching contribution to employee 401(k) contributions, helping to enhance retirement savings.

What is the eligibility requirement to participate in loanDepot's 401(k) plan?

Employees at loanDepot are eligible to participate in the 401(k) plan after completing a specified period of employment, typically 30 days.

Can loanDepot employees choose how to invest their 401(k) contributions?

Yes, loanDepot employees can choose from a variety of investment options within the 401(k) plan to align with their retirement goals.

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

loanDepot employees can change their 401(k) contribution amounts at any time, subject to plan rules.

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

Yes, loanDepot has a vesting schedule for matching contributions, which means employees must work for a certain period before they fully own the match.

What is the maximum contribution limit for loanDepot's 401(k) plan?

The maximum contribution limit for loanDepot's 401(k) plan is in accordance with IRS guidelines, which can change annually.

Does loanDepot offer a Roth 401(k) option?

Yes, loanDepot offers a Roth 401(k) option, allowing employees to contribute after-tax dollars to their retirement savings.

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

Yes, loanDepot allows employees to take loans against their 401(k) savings, subject to specific terms and conditions.

What happens to loanDepot employees' 401(k) accounts if they leave the company?

If loanDepot employees leave the company, they can choose to roll over their 401(k) balance to another retirement account or leave it in the loanDepot plan, depending on the balance.

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

LoanDepot offers a 401(k) plan for its employees, with contribution limits consistent with federal regulations. In 2023, employees could contribute up to $22,500, while those aged 50 and older could contribute an additional $7,500 as a catch-up contribution, raising their total to $30,000. In 2024, these limits increased to $23,000 and $7,500, respectively. LoanDepot's 401(k) plan also allows for combined employee and employer contributions, with the total limit set at $66,000 in 2023 and increasing to $69,000 in 2024. Employees may also make after-tax contributions if allowed by the plan, subject to total contribution limits (Fidelity) (Pension Rights Center). In terms of pension plans, LoanDepot follows federal guidelines under the Employee Retirement Income Security Act (ERISA). Employees receive a summary plan description (SPD) upon enrolling in the plan, detailing service requirements, vesting schedules, and benefit calculations. The plan administrator is required to provide these details, which help employees understand when they can start participating in the plan and how their benefits are calculated. LoanDepot also offers an annual report on plan assets, ensuring transparency for participants (DOL) (Pension Rights Center).

Restructuring and Layoffs: In July 2023, loanDepot implemented a significant round of layoffs, affecting approximately 2,000 employees. This is part of a broader restructuring effort in response to rising interest rates and a downturn in the housing market. The company continues to reduce its workforce to maintain profitability amid declining mortgage volumes. Importance: The layoffs at loanDepot reflect broader trends in the financial services industry, where companies are adjusting to higher interest rates and reduced demand for mortgage products. It is essential to address this news due to the ongoing economic uncertainty and the ripple effects of political decisions, such as the Federal Reserve's monetary policies, on the mortgage industry. Additionally, tax policy changes could influence housing market behavior, making it vital for employees and investors to stay informed about these restructuring efforts to make well-informed decisions.

loanDepot has structured its employee compensation plans to include stock options and Restricted Stock Units (RSUs), focusing on aligning employee incentives with company growth and performance. For 2022, 2023, and 2024, loanDepot has made RSUs available primarily to executive leadership and key employees. These RSUs are part of their long-term incentive plan, designed to reward employees based on the company’s performance over time. RSUs typically vest over several years, providing employees with shares of loanDepot stock at predetermined intervals, subject to continued employment. In addition to RSUs, loanDepot has offered stock options, though these have been less frequently granted in recent years compared to RSUs. Stock options give employees the right to purchase shares of loanDepot stock at a set price, usually based on the stock price at the time of the grant. Both stock options and RSUs are available to select employees, usually in senior roles, but broader availability has been limited as the company restructures its compensation framework in response to market conditions. RSUs, particularly through loanDepot's executive compensation program, are designed to retain top talent and reward long-term contributions to the company. Vesting typically spans a 3-4 year period, incentivizing retention and aligning with shareholder interests. Documentation of these plans can be found in loanDepot's SEC filings, including their annual proxy reports. For example, details on RSU grants and stock option availability for 2022 and 2023 are outlined in the 2023 Annual Report and 2022 Proxy Statement (loanDepot) (loanDepot) (loanDepot). These reports provide specifics on the number of RSUs granted and the vesting schedules, with key details found on pages 34 and 58 of the 2023 Proxy Statement.

loanDepot offers a comprehensive health benefits package to its employees, including multiple options for medical, dental, and vision coverage. Their medical plans typically feature Preferred Provider Organization (PPO) and Health Maintenance Organization (HMO) options, catering to a wide range of employee needs. The company has emphasized mental health support as part of its overall well-being program, providing access to resources such as therapy sessions, wellness coaching, and mental health hotlines. Additionally, loanDepot includes coverage for preventive services, with an emphasis on annual health checkups and screenings to promote early detection and wellness among employees. These benefits are designed to align with loanDepot's broader strategic goals under their Vision 2025 plan, which focuses on cost savings while maintaining essential employee benefits. In the context of the current economic and political environment, discussing loanDepot's healthcare benefits is crucial as the company navigates financial challenges, including significant losses reported in recent years. The ability to maintain robust health benefits, even in the face of cost-cutting measures, reflects the company’s commitment to its workforce. With healthcare costs rising nationwide and ongoing debates around healthcare policy, the company's approach to providing accessible and comprehensive health coverage can have significant implications for employee satisfaction and retention. Furthermore, in a time of economic uncertainty, offering strong healthcare benefits helps ensure that employees remain healthy and productive, which is vital for the company's operational success.

For more information you can reach the plan administrator for loanDepot at , ; or by calling them at .

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