Healthcare Provider Update: Healthcare Provider for Lithia Motors: Lithia Motors employees typically receive healthcare benefits through a variety of insurance providers, including major national insurers such as UnitedHealthcare, Aetna, and Blue Cross Blue Shield. These insurance partners offer comprehensive health plans that cater to the needs of Lithia Motors' workforce. Potential Healthcare Cost Increases in 2026: In 2026, Lithia Motors employees may face significant increases in healthcare costs, driven by a combination of factors impacting the Affordable Care Act (ACA) marketplace. Premiums for ACA plans are projected to rise sharply, with some states experiencing hikes upwards of 60%, primarily due to the expiration of enhanced federal subsidies and escalating medical costs. As a result, employers like Lithia Motors may adjust their benefit structures, potentially shifting a greater share of healthcare expenses onto employees. Navigating this landscape will require diligence in understanding upcoming benefit changes and making informed decisions about health plan selections to mitigate rising out-of-pocket costs. Click here to learn more
As Lithia Motors employees transition into retirement, you need to continually review and adjust your portfolio to better fit your long-term goals - and if you're dealing with required distributions and rising healthcare costs, working with a financial expert like Tyson Mavar at The Retirement Group can help you optimize these decisions.
So for Lithia Motors employees approaching retirement age, planning now should include conservative spending and a diversified portfolio to ensure retirement income lasts a lifetime, and working with an advisor like Patrick Ray at The Retirement Group can help you tailor a strategy to fit your needs.
In this article, we will discuss:
1. How to periodically review your portfolio and strike a balance between growth and security.
2. How to spend wisely and plan withdrawals for a sustainable retirement.
3. Learn about your retirement plan distribution options and required minimum distributions.
Your years of work for Lithia Motors have been geared toward your retirement. That day is here! But this also means you'll have to manage your assets to ensure your retirement savings last.
Review Your Portfolio Regularly
We first suggest our Lithia Motors clients regularly review their portfolios. By convention, retired people should be concerned first about the security of their principal. Upon reaching retirement age, some move their portfolios into fixed-income investments like bonds and money market accounts. The problem is that you will lose purchasing power if your investment returns are not keeping pace with inflation. Although you should generally aim to get more conservative with age, we think it prudent for our Lithia Motors clients to at least have some of their portfolio in growth investments.
Spend Wisely
But we caution our clients not to assume they can live comfortably for the rest of their lives on earnings from their investment portfolios and Lithia Motors-sponsored retirement accounts - and that they should spend wisely. You may eventually have to start drawing on the principal. Lithia Motors customers must avoid spending too much too soon. Such a temptation can be especially strong early in retirement.
An acceptable thumb rule for our Lithia Motors clients is to limit their annual withdrawal rate to 4 - 6 percent of the portfolio. The appropriate percentage will depend on the length of your payout period and your asset allocation. But our Lithia Motors clients should also consider that running down the principal too quickly may mean they will not make enough money on the remaining principal to last them through later years.
Understand Your Retirement Plan Distribution Options.
Most pension programs offer these benefits as an annuity. Typically, our Lithia Motors clients who are married choose either a larger retirement benefit for themselves or a smaller benefit for their spouse upon death. You should consult a financial expert about this important decision.
Other Lithia Motors-sponsored retirement plans pay benefits in the form of annuities, such as 401(k)s. You may have limited distribution (and investment) options. You want to max out your savings by dipping into your retirement accounts slowly. This will preserve your principal and allow it to grow tax-deferred during your retirement years after leaving Lithia Motors.
Think about whether you should convert your Lithia Motors retirement account to a traditional IRA with lots of withdrawal options if your new employer has a retirement plan and allows a rollover.
Plan for Required Distributions
Note to Lithia Motors customers: You must begin drawing minimum distributions from retirement plans and traditional IRAs by age 70½, whether or not you need them. Consider spending these first years in retirement.
No distributions are required for Lithia Motors customers with a Roth IRA during their lifetime. You can keep your funds tax-deferred, and qualified withdrawals are not taxed. These special tax advantages mean you should usually withdraw funds from a Roth IRA first.
Know Your Social Security Options.
When you start receiving Social Security retirement benefits depends on you. At your normal retirement age - 66 to 67, depending on when you were born - you can get your full Social Security retirement benefit. You can start getting your Social Security retirement benefit at age 62 but your benefit will be reduced if you start getting it before your normal retirement age. By contrast, putting off your Lithia Motors retirement decreases your Social Security retirement benefit.
Consider Phasing
Some find the transition from Lithia Motors employee to Lithia Motors retiree difficult. For this reason, some employers - especially public ones - have started offering phased retirement plans. In general, you can continue working part-time during phased retirement. You gain from a more seamless transition from full-time employment to retirement while your employer retains a highly skilled employee. Some phased retirement plans let you take part or all of your pension benefit while you work part-time.
Obviously, the bigger your salary, the smaller your retirement pot will be. Still, have tax-deferred funds in your IRA or Lithia Motors-sponsored retirement plan if you delay full retirement. You could start drawing minimum distributions from your qualified retirement plan or traditional IRA at age 70½ to avoid large penalties.
For our Lithia Motors customers who continue to work, know the consequences. Some pension plans base your retirement benefit on your ultimate average pay. Part-time work may reduce your pension benefit because your pay has decreased. Remind these Lithia Motors employees that if they are under the normal retirement age, their employment income could affect Social Security retirement benefits. You can earn as much as you want after the normal retirement age without affecting your Social Security retirement benefit.
Facing a Shortfall
But what if, nearing Lithia Motors retirement, you find your retirement income is not enough to cover your retirement costs? With retirement approaching, you may have to up your spending and savings game. A little money can add up quickly if you save and earn a decent return. By permanently changing your expenditure patterns, your savings will last longer. Create a budget for where your money is going. Some ways our clients at Lithia Motors can stretch their retirement funds:
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Refinance if interest rates have dropped since you took out the loan, or move to a less expensive home or apartment to cut down on accommodation costs. Use your home equity. Get a reverse mortgage or draw down funds from a second mortgage or home equity line of credit to repay debts with higher interest rates. You own two vehicles - Sell one. Your remaining vehicle should be replaced - buy a pre-owned vehicle. Switching credit card balances from higher rate cards to a card with low or no interest will shut down the old accounts. Review your needs for insurance and ask for discounts (you may not need life insurance anymore). Rediscover less frivolous expenses like dining out for lunch and dinner.
Planning ahead, investing wisely, and controlling spending can increase your chances of a financially secure Lithia Motors retirement.
Added Fact:
Consider how much healthcare costs will affect your retirement. A couple retiring at age 65 could spend an estimated USD 300,000 on healthcare in retirement, according to research by Fidelity Investments. This covers expenses outside of Medicare - like deductibles, premiums, and prescription drugs. We recommend our Lithia Motors clients consider incorporating these potential costs into their retirement planning and exploring Medicare supplemental insurance or health savings accounts to help offset the cost of healthcare in retirement. (Source: Plan for rising healthcare costs - Fidelity Investments).
Added Analogy:
Retirement is like climbing a mountain to the top. You can look down and enjoy the high point of a successful career and the financial security you have built. The journey doesn't stop there though. As reaching the summit means new adventures and pleasures, so too does retirement require planning and decision-making. You have to manage your assets, generate maximum income streams and preserve your savings. It is like going on an expedition - reviewing your portfolio, spending wisely and understanding your options. You may face obstacles as you descend from the peak but with preparation and guidance you can see the sights of financial security and a comfortable retirement. Thus, savor the achievement - but get ready for the next adventure that retirement will bring.
Sources:
1. Yahoo Finance. 'Cognizant Technology Solutions Corporation (CTSH) Stock Price.' Yahoo Finance, 2024, finance.yahoo.com/quote/CTSH.
2. Google Finance. 'Cognizant Technology Solutions Corporation (CTSH) Stock Quote.' Google Finance, 2024, www.google.com/finance/quote/CTSH?sa=X&ved=2ahUKEwiN5KHL0v7_AhUJxosKHZlNBUoQ3ecFegQINBAY .
3. Bloomberg. 'Cognizant Technology Solutions Corporation.' Bloomberg, 2024, www.bloomberg.com/quote/CTSH:US .
4. MarketWatch. 'Cognizant Technology Solutions Corporation (CTSH).' MarketWatch, 2024, www.marketwatch.com/investing/stock/ctsh .
What retirement savings options does Lithia Motors offer to its employees?
Lithia Motors offers a 401(k) plan as a primary retirement savings option for its employees.
How can employees of Lithia Motors enroll in the 401(k) plan?
Employees can enroll in the Lithia Motors 401(k) plan through the company’s HR portal or by contacting the HR department for assistance.
Does Lithia Motors match employee contributions to the 401(k) plan?
Yes, Lithia Motors offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.
What is the vesting schedule for Lithia Motors' 401(k) matching contributions?
The vesting schedule for Lithia Motors' 401(k) matching contributions typically follows a standard timeline, which can be confirmed in the employee handbook or by HR.
Can employees of Lithia Motors take loans against their 401(k) savings?
Yes, Lithia Motors allows employees to take loans against their 401(k) savings, subject to certain terms and conditions.
What investment options are available in the Lithia Motors 401(k) plan?
The Lithia Motors 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to diversify their portfolios.
Is there a minimum contribution requirement for the Lithia Motors 401(k) plan?
Yes, Lithia Motors may have a minimum contribution requirement for employees wishing to participate in the 401(k) plan, which can be found in the plan documents.
How often can employees change their contribution amounts to the Lithia Motors 401(k) plan?
Employees of Lithia Motors can typically change their contribution amounts at any time, but it’s advisable to check the specific guidelines in the plan documents.
What is the age requirement for employees to start contributing to the Lithia Motors 401(k) plan?
Employees must be at least 21 years old to start contributing to the Lithia Motors 401(k) plan, in accordance with IRS regulations.
Does Lithia Motors offer financial education resources for employees regarding their 401(k) plan?
Yes, Lithia Motors provides financial education resources and workshops to help employees understand and manage their 401(k) plans effectively.
Pension and 401(k) Benefits: Lithia Motors offers a range of retirement benefits, including a 401(k) plan with company match, employee stock purchase plans, and performance bonuses. The 401(k) plan allows employees to manage their investments, take out loans against their vested balances, and choose different disbursement methods upon retirement. The company also offers pension benefits for eligible employees, including projections and beneficiary management (Built In) (Benefits Account Manager).