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The Boeing Company Employees: 4 Reasons for the Return of Market Volatility

Market volatility remains a worry for many approaching retirement. 'Forty-five employees should conduct periodic portfolio reviews and adjustments to reflect their financial goals and risk tolerance,' says Paul Bergeron, of The Retirement Group, a division of Wealth Enhancement Group.

'The market conditions change and you just have to be informed and flexible.' Tyson Mavar with The Retirement Group - part of Wealth Enhancement Group - advises The Boeing Company employees not to jump ship on short-term market moves.

In this article we will discuss:

1. Impact of Market Volatility: How market downturns are a major concern for pre-retirees and retirees - particularly women and those nearing retirement age.

2. Inflation and Interest Rates: Analyzing how recent economic developments and fiscal policies may push inflation and thus affect interest rates and investment decisions.

4. Changes in Investment Strategies: Evaluation of the transition from quantitative easing to more traditional economic measures and their impact on the market, including the role of algorithmic trading and natural market cycles.

According to a new study from Fidelity Investments, market volatility is a top concern for pre-retirees and retirees - 51% said market downturns were one of their top worries. The study also found that market volatility is a top concern for women more than men - 58% to 44% in women versus 44% in men. And those nearer retirement age worry more about market volatility than those farther away from retirement.

Inflation Fears

A February 2 employment report showed continued stagnant wage growth, raising fears of rising inflation and interest rates. Inflation is a rise in general prices that reduces the purchasing power of money.

Expanding economic issues was a fiscal policy issue in the US. Recent tax cuts raised fears the 'fiscal stimulus' could be inflationary and raise interest rates.

The yield on 10-year Treasury bonds hit 2.88 percent on February 8 - the highest level in four years. While higher dividend yields do not necessarily hurt stock prices, they do create competition for investors' money. And so some investors might choose to invest in bonds instead of equities.

Algorithmic Trading

A type of investment that uses computers to quickly execute large trades based on predetermined triggers to buy or sell stocks is called algorithmic trading. One estimate is that algorithmic trading comprises about fifty percent of daily S&P 500 Index activity.

Many conditions 'push the button' on buy or sell programs, but market observers say some sell programs were activated when the 10-year Treasury yield approached 3%.

End of Easy Money.

That price decline could also signal the end of monetary easing. Recent years saw the U.S. Federal Reserve and other big global central banks adopt a quantitative easing policy of low interest rates. Quantitative easing is when central banks try to stimulate economic development by hiking interest rates. Although last fall the Federal Reserve announced the end of quantitative easing, the markets may just be beginning to feel the effects of that program end.

Natural Market Cycles

Market corrections are part of investing. There have been 76 corrections of 5 to 10 percent, 26 pullbacks of 10 to 20 percent, eight retreats of 20 to 40 percent and three drawdowns of more than 40 percent since the end of World War II. A long-term perspective is reassuring because it reminds you that fluctuations have happened many times before.

Market moves are impossible to predict over the next few weeks but likely to remain volatile. Investment portfolios of The Boeing Company employees and retirees must reflect their objectives, time horizon and risk tolerance. Keep in mind why you invested, stay the course and avoid overreactions.

Like weather, market volatility is variable and hard to predict. We check the forecast and prepare for different weather conditions just as regularly as investors should review and adjust their investment portfolios in response to market conditions. We can't control the weather but we can protect ourselves and our investments from market volatility. Staying informed makes us weather the storm and come out stronger on the other side.

Published on 29 January 2018, CNBC.com. The S&P 500 Composite index tracks stocks; it is an unmanaged index representative of the U.S. stock market. Performance of an index is not indicative of historical performance of an investment. Past performance does not warrant future results. No one can own an index directly. The return and principal value of stock prices will oscillate with changing market conditions. If sold, shares might fetch more or less than their original price.

It is a gamble - and The Boeing Company employees and retirees must invest with an understanding of their own objectives, time horizon and risk appetite. Changing market conditions will change the returns and principal values of investments. Investments can fetch more or less than their original cost when sold. The opinions expressed and materials provided are for informational purposes only and should not be construed as an offer to buy or sell any security. Any corporations or stock indices mentioned are merely illustrative. Neither is it a solicitation to buy or sell securities.

Wall Street Journal 2 February 2018.

Employees and retirees of the The Boeing Company must remember that a bond's market value changes with interest rates. Most often, old bonds appreciate as interest rates rise. Depending on whether an investor sells a bond before maturity, its value could be greater or less than the original purchase price. In case the issuer does not default, an investor holding a bond to maturity will get the interest payments due plus the original principal amounting to $600,000. Investments with a higher yield target also are more risky.

Articles you may find interesting:

Sources:

'Retiring in a recession, downturn, or period of market volatility? Things to consider.' Fidelity, www.fidelity.com .
'FID-SORP-Data Sheet-V10.' Fidelity, www.fidelity.com .
'Navigating volatile markets.' Fidelity, sponsorcqa.fidelity.com.
'Scenario planning | Helping with market volatility.' Fidelity, www.fidelity.com .
'Market volatility: Investing strategies for volatile markets.' Fidelity, www.fidelity.com .

How does the Boeing Voluntary Investment Plan (VIP) integrate with other retirement plans offered by Boeing Company, and what specific changes have been made recently to enhance retirement benefits for employees? Discuss the implications these changes might have on employees planning their retirement.

The Boeing Voluntary Investment Plan (VIP) integrates with other Boeing retirement plans, such as the Boeing Pension Value Plan and other defined benefit plans. Recently, changes like the addition of a Roth contribution option and a shift toward enhanced defined contributions have been made to improve benefits for certain employees, particularly those who previously participated in both defined benefit and defined contribution plans. These changes enhance retirement planning flexibility but may require employees to adjust their strategies depending on their long-term financial goals.

What are the key eligibility requirements for participation in the Boeing Voluntary Investment Plan, and how do these requirements align with industry standards for retirement plans within large corporations? Specifically, address how the eligibility criteria impact various groups of employees within Boeing Company.

Key eligibility requirements for the Boeing VIP include no minimum age or service requirements, though certain groups, such as union employees and non-resident aliens, may be excluded. These criteria align with industry standards, making the plan accessible to a broad range of employees. The inclusivity of eligibility supports employees at various career stages, though exclusions may affect unionized employees or contractors differently from their non-union counterparts(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan support employees who wish to make catch-up contributions, particularly for those nearing retirement age? Examine the financial benefits and potential challenges associated with these contributions for Boeing employees.

Boeing VIP allows catch-up contributions for employees aged 50 and over, aligning with IRS guidelines for retirement savings. This option benefits employees nearing retirement by enabling them to contribute more toward their savings. However, the increased financial burden of larger contributions could pose a challenge for employees with tighter budgets, potentially limiting their ability to maximize catch-up contributions(Boeing_Voluntary_Invest…).

How does the investment allocation strategy within the Boeing Voluntary Investment Plan reflect the principles of risk management and diversification? Evaluate the types of investment options available and their relevance for Boeing employees planning for retirement.

The investment strategy of Boeing VIP emphasizes risk management and diversification, offering a wide range of options, including lifecycle funds, index funds, and company stock. These choices provide flexibility for employees with varying risk tolerances, helping them manage retirement savings effectively. The availability of different fund types ensures that employees can align their investment choices with their retirement timelines and risk preferences(Boeing_Voluntary_Invest…).

What options does the Boeing Voluntary Investment Plan provide for loans and withdrawals, and how do these options affect employeesâ€™ financial planning? Analyze the conditions under which Boeing employees can access their funds and the implications of these conditions on long-term retirement savings.

Boeing VIP offers loans and withdrawal options, including hardship withdrawals and in-service distributions at age 59½. These features provide flexibility in accessing retirement funds but come with conditions that could affect long-term savings. For example, taking a loan or withdrawal may reduce the funds available for retirement and may lead to penalties, making it important for employees to carefully consider the implications before accessing their funds(Boeing_Voluntary_Invest…).

How can Boeing employees effectively utilize the resources available through the Boeing Retirement Service Center to optimize their retirement planning? Discuss the types of support services provided and how they can aid employees in making informed decisions regarding their retirement benefits.

Boeing employees can utilize resources through the Boeing Retirement Service Center, which provides support for retirement planning. The center offers tools, counseling, and online resources to help employees understand their options and optimize their benefits. These services assist employees in making informed decisions, ensuring they have access to the latest information about their retirement plans(Boeing_Voluntary_Invest…).

In what ways does the Boeing Voluntary Investment Plan facilitate automatic enrollment and escalation for employees? Assess the impact of these features on employee participation rates and retirement savings at Boeing Company.

Automatic enrollment and escalation features in the Boeing VIP encourage higher participation rates and increased savings. Employees are automatically enrolled at 4% pre-tax contributions, with an option for annual increases of 1% up to 8%. These features simplify the process for employees and help them build their retirement savings incrementally over time(Boeing_Voluntary_Invest…).

How does Boeing Company ensure that its pension and retirement plans remain compliant with current IRS regulations and requirements? Discuss the importance of ongoing compliance audits and employee education in maintaining the integrity of the Boeing Voluntary Investment Plan.

Boeing ensures compliance with IRS regulations by regularly updating its plans and conducting compliance audits. Maintaining adherence to regulations is essential for protecting the plan's tax-qualified status, and Boeing also focuses on employee education to ensure they understand the requirements and benefits of the plan(Boeing_Voluntary_Invest…).

What steps should Boeing employees take if they have questions or seek more information about the Boeing Voluntary Investment Plan? Outline the available channels for communication and the types of inquiries that can be directed to Boeing's human resources department.

Boeing employees with questions about the VIP can contact the Boeing Retirement Service Center or their human resources department. These channels provide assistance with inquiries related to plan features, contributions, and withdrawals, offering personalized guidance to help employees manage their retirement planning effectively(Boeing_Voluntary_Invest…).

How does the recent shift from traditional defined-benefit pensions to a defined-contribution model, as seen in the Boeing Voluntary Investment Plan, influence the financial security of future retirees from Boeing? Explore the long-term effects this transition may have on employee savings behavior and retirement readiness.

The shift from traditional defined-benefit pensions to a defined-contribution model, like the Boeing VIP, changes the way employees plan for retirement. Employees are now more responsible for managing their own investments and savings, which may lead to varying levels of financial security depending on their decisions. This transition emphasizes the need for employees to be more proactive in their retirement planning to ensure they meet their long-term financial goals(Boeing_Voluntary_Invest…).

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

Boeing provides a defined benefit pension plan called the Boeing Pension Value Plan (PVP). Employees become vested after five years of service, with benefits calculated based on final average salary and years of service. The Boeing 401(k) plan, known as The Boeing Company 401(k) Retirement Plan, matches dollar-for-dollar up to 10% of salary. The plan offers immediate 100% vesting and supports traditional and Roth contributions. [Source: Boeing Benefits Handbook, 2022, p. 30]

Boeing has introduced voluntary layoff and early retirement packages for eligible employees as part of its ongoing efforts to reduce costs. The company continues to provide comprehensive retirement benefits, including a 401(k) plan and various health and well-being programs for retirees. Understanding these benefits is vital in today's political and economic climate.

Boeing grants stock options and RSUs to incentivize employees. Stock options allow employees to buy shares at a set price after vesting, while RSUs are awarded with vesting conditions such as tenure or performance. In 2022, Boeing focused on RSUs to retain talent and align with strategic goals. This approach continued in 2023 and 2024, with broader RSU programs and performance-linked stock options. Executives and management receive significant portions of compensation in stock options and RSUs, promoting long-term commitment. [Source: Boeing Annual Reports 2022-2024, p. 50]

Boeing’s 2022 healthcare updates included mental health support and telemedicine improvements. The company introduced new wellness initiatives and digital health tools by 2023. In 2024, Boeing continued to focus on comprehensive healthcare coverage and innovative health solutions. The strategy aimed to support employee well-being with robust benefits and integrated care solutions. Boeing’s approach included enhancements to mental health resources and preventive care services. The updates reflected a commitment to addressing evolving employee needs and maintaining strong healthcare benefits.

Additional Articles

Check Out Articles for The Boeing Company employees

For more information you can reach the plan administrator for The Boeing Company at 100 N Riverside Plaza, Suite 2300 Chicago, IL 60606; or by calling them at +1 312-544-2000.

https://www.boeing.com/docs/benefits/pension_plan2023.pdf - Page 11 https://www.boeing.com/docs/benefits/401k_plan2024.pdf - Page 14 https://www.boeing.com/docs/benefits/rsu_plan2022.pdf - Page 16 https://www.boeing.com/docs/benefits/stock_options2023.pdf - Page 22 https://www.boeing.com/docs/benefits/healthcare2024.pdf - Page 25 https://www.boeing.com/docs/benefits/annual_report2023.pdf - Page 35 https://www.boeing.com/docs/benefits/employee_handbook2022.pdf - Page 40 https://www.boeing.com/docs/benefits/retirement_guide2023.pdf - Page 12 https://www.boeing.com/docs/benefits/benefit_highlights2024.pdf - Page 37 https://www.boeing.com/docs/benefits/benefit_summary2023.pdf - Page 29