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Deciding When to Retire: When Timing Becomes Critical PPG Industries

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For PPG Industries employees planning on retiring, it is important to consider not only the financial fitness, but also the emotional and psychological fitness of leaving the workforce and entering the world of retirement,' advises Michael Corgiat of The Retirement Group, a division of Wealth Enhancement Group. 'Taking a proactive stance towards retirement planning can significantly increase the quality and duration of your retirement.'

'Brent Wolf of The Retirement Group, a division of Wealth Enhancement Group, stresses that it is crucial for PPG Industries employees to comprehend the dynamics of social security timing, pension benefits, and personal savings strategies. He recommends starting these assessments early to make decisions that lead to a better retirement income and longevity.'

In this article, we will discuss:

  1. Workforce Trends: This paper will focus on the current trend of workers aged 60 and above who decide to remain in the labour market after the conventional retirement age for financial and personal reasons.

  2. Retirement Planning: Some of the issues and strategies for people retiring from PPG Industries companies, including when to claim Social Security benefits, how to manage health care costs, and when to move from savings to investments.

  3. Phased Retirement Options: The advantages of phased retirement programs that enable aging workers to work part-time and draw their pension benefits, thus easing the transition to retirement.

In a study done by the Transamerica Center for Retirement Studies in 2020, the Transamerica Center for Retirement Studies found that a large number of workers aged 60 or above have plans to work even after reaching their retirement ages. Some of the reasons included: the need for engagement and the need for more income. The study also established that 56% of workers aged 60 or higher had plans to work in retirement. This trend has implications for retirement planning and understanding how factors like healthcare costs and expected income determine the retirement age. Knowledge of the options and benefits that are available for people who remain employed during retirement can also help individuals make informed decisions regarding their retirement timing.

Retirement: A State of Mind

Do not underestimate the psychological factors that determine the age at which one should retire. Many people enjoy the opportunity to start anew. Some people delay retirement or go back to work to keep feeling useful. You will also have to change your attitude – from saving, to investing for income, and managing several income sources.

This is a multi-step process that will involve making decisions and calculations. You will also have to estimate your probable expenses, your retirement income, and how many years your retirement funds may have to last. It is also important that our PPG Industries customers take into consideration their life expectancy and health, when they would like to start receiving Social Security or pension benefits, and when they would like to start withdrawing from their retirement accounts.

These may be otherwise unrelated factors in a comprehensive plan for retirement income, and each of them may affect the others in some way.

Thinking About Early Retirement?

This means that early retirement from PPG Industries means fewer working years and more savings. Moreover, the earlier you retire from PPG Industries, the more years your retirement funds will have to support you. If you plan correctly, you may be retired for quite some time. According to the National Vital Statistics Report, the average lifespan today is more than 30 years longer than it was a century ago.

Your retirement savings will last longer and inflation will reduce your buying power. If the average inflation rate is 3% per year, as it has been since 1914, then a fixed annual income will be worth 50% of its purchasing power over about 23 years. You will probably require an annual rise in your retirement income to keep up with the cost of living when considering inflation. This should be taken into consideration when calculating how many years you believe you will be in retirement (or how many years you can afford to be in retirement).

Current Life Expectancy Estimates

Men Women
At birth 76.2 81.2
At age 65 83.1 85.7

If you need it in another format or style, just let me know how you'd like it adjusted!

Source: NCHS Data Brief, Number 355, January 2020

There are some other things that PPG Industries clients should also know. For instance, if you expect to receive pension payments, early retirement may reduce them. Why? It is because the highest accumulation of benefits is usually in the last few years of your employment when you are likely to earn most. Early retirement may reduce the monthly benefits that you receive. It will also affect your Social Security benefits.

Also, you should note that if you plan to retire from PPG Industries before the age of 59 ½ and withdraw your 401(k) or IRA funds, then you are likely to incur a 10% early withdrawal penalty in addition to any ordinary income tax on the distribution (however, there are certain exemptions, including disability payments and 401(k) distributions after age 55 and termination of employment).

Finally, Medicare benefits are only available to those who are 65 years and above. If you are not eligible for retiree health benefits from PPG Industries or accept a job that offers health insurance, then you will need to find out how much you stand to pay for insurance or health care, at least until you are eligible for Medicare.

Postponing Retirement

Deferring your PPG Industries retirement allows you to keep on contributing to your retirement plans. This is especially good for you if you are contributing to tax deferred accounts and PPG Industries is contributing to your account as well. For instance, if you work for PPG Industries for 10 years longer, from age 65 instead of 55, and save $20,000 a year at an 8% rate of return, you could add $312,909 to your retirement fund. This example is hypothetical and does not represent the actual performance of any particular investment. Although you may no longer be adding to your retirement account, delaying retirement simply delays the time when you must begin taking distributions. This could enhance the ability of your nest egg to last throughout your lifetime.

You are given more time to transition by delaying your retirement from PPG Industries. If you anticipate transitioning from your full-time job to a small business or a new career once you “retire,” you might be able to get ready for a new life by taking nights classes or trying out your new role on a part-time basis. You can get a taste of what your post retirement work life will be like by phasing into your plans while you are still with PPG Industries. This is particularly important before relying on a new venture for retirement income, which can help you determine how much you can expect to earn from it. In addition, you will learn if it is something that you really want to do before investing what could be a large portion of your retirement funds into it.

Phased Retirement: The Best of Both Worlds

Some employers have started to offer phased retirement programs that allow you to collect all or part of your pension while still working part-time for the same employer.

As the baby boomers age, more people are interested in phased retirement programs. In the past, private sector pension law put pressure on employees to retire early. Classic pension plans usually did not permit payment of benefits before the employee ceased employment or reached the plan’s normal retirement age, which was usually 65. This often led employees who wanted to reduce their working hours but were not yet old enough to retire normally to accept early retirement and find another job (often at a competitor) and collect both a pension and a salary from their first employer.

Pension plans are now permitted to provide benefits to employees at age 62 if the employee is still employed and has not met the plan’s normal retirement age. Both the employee and the employer can benefit from a phased retirement strategy: The employee can work fewer hours and ease into retirement more gradually, while the employer can keep a seasoned employee. Phased retirement is not a required option for employers, but if PPG Industries does offer it, you should consider how it might affect your plans.

Key Decision Points Age Don’t forget...
Eligible to tap tax-deferred savings without penalty for early withdrawal 59 ½ Federal income taxes will be due on contributions and earnings made prior to taxation.
Eligible for early Social Security benefits 62 Taking retirement benefits before age 65 reduces monthly payments.
Eligible for Medicare 65 -

Check Your Assumptions

The sooner you start to think about the timing of your retirement from PPG Industries, the more opportunities you will have to make changes that will help to make those years be all that you want them to be. You may need to rethink some of your assumptions or decisions you have made so far if you are contemplating a phased retirement. As you move from PPG Industries into retirement, you will need to keep an eye on your retirement income plan to make sure that your initial assumptions are still good, that no new laws or regulations have affected your situation, and that your savings and investments are performing as they should.

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Conclusion

Investing in retirement can be compared to planting a tree. Just like a tree, a retirement investment needs time, patience, and care to grow and provide benefits in the future. It takes the right kind of environment – a diversified portfolio, for instance, and the advice of a financial adviser to thrive and weather the inevitable storms. However, like a tree, it can provide shade, shelter and beauty, and a well-planned retirement investment can provide security, comfort and a sense of fulfillment in later years.

Sources:

1. Collinson, Catherine. 'Workers Are Saving for Retirement Despite Challenges Amid the Pandemic.' Transamerica Center for Retirement Studies, 2021. Transamerica Institute.  www.transamericainstitute.org .

2. Collinson, Catherine. 'The Road Ahead: Addressing Pandemic-Related Setbacks and Strengthening the U.S. Retirement System.' 22nd Annual Retirement Survey, 2021. Transamerica Institute.  www.transamericainstitute.org .

3. Collinson, Catherine. '20th Annual Retirement Survey.' Transamerica Center for Retirement Studies, 2020. Transamerica Center.  www.transamericacenter.net .

4. Collinson, Catherine. 'Four Generations of Workers Are Preparing for Retirement Amid an Uncertain Future.' Transamerica Institute, 2020. Transamerica Institute.  www.transamericainstitute.org .

5. Collinson, Catherine. 'Employed Workers Are Saving for Retirement, but Many Are Not Saving Enough.' Transamerica Institute, 2021. Transamerica Institute.  www.transamericainstitute.org .

What are the key factors that PPG Industries (UK) Limited employees should consider when planning for retirement, and how does the PPG Pension Hub facilitate this planning process to ensure a secure financial future?

Key factors for retirement planning and PPG Pension Hub: Employees at PPG Industries (UK) Limited should consider their lifestyle goals, contributions, and the age at which they wish to retire. The PPG Pension Hub facilitates retirement planning by providing access to personal pension data, modeling tools, and resources that help employees visualize their retirement income and savings adjustments​(PPG INDUSTRIES UK LIMIT…).

How does the introduction of the Bridging Pension option affect the retirement planning of PPG Industries (UK) Limited employees, particularly those who are considering retiring before reaching State Pension age?

Bridging Pension option and retirement planning: The Bridging Pension option allows employees to receive a higher pension before reaching State Pension age and then reduces their pension once the State Pension begins. This is helpful for those retiring early, as it smooths their income before State Pension payments start​(PPG INDUSTRIES UK LIMIT…).

In what ways can employees of PPG Industries (UK) Limited maximize their contributions to the DC section of their pension plan, and what strategies can they employ to adjust their retirement savings for unexpected financial needs?

Maximizing contributions to the DC section: Employees can adjust their retirement savings by increasing their regular or one-off contributions. The secure member website provides a tool, myTarget, that shows the impact of increased contributions on future benefits, helping employees manage unexpected financial needs​(PPG INDUSTRIES UK LIMIT…).

How does PPG Industries (UK) Limited's change to the life assurance arrangement impact employees’ beneficiaries upon their death, and what steps should employees take to ensure their Expression of Wish Form is up to date?

Impact of changes to life assurance arrangement: The new life assurance arrangement removes the risk of exceeding the Lifetime Allowance by paying a lump sum outside the pension plan. Employees should ensure their Expression of Wish Form is up to date to guarantee the correct beneficiaries receive their lump sum upon death​(PPG INDUSTRIES UK LIMIT…).

What are the implications of the recent updates regarding Guaranteed Minimum Pension (GMP) equalization for PPG Industries (UK) Limited employees, and how can affected employees monitor the status of their benefits?

GMP equalization updates: The GMP equalization process ensures that pensions are equalized for men and women. Affected employees will be notified if changes apply to their benefits, and they should monitor communications from the plan administrators for updates​(PPG INDUSTRIES UK LIMIT…).

How can PPG Industries (UK) Limited employees prepare for potential changes in minimum pension age and state pension age, and what resources are available through the company to assist in this planning?

Preparing for changes in pension age: With the normal minimum pension age rising to 57 in 2028 and the State Pension age increasing, employees should review their retirement plans. PPG Industries offers resources like the PPG Pension Hub and financial advice services to help employees plan for these changes​(PPG INDUSTRIES UK LIMIT…).

How can employees of PPG Industries (UK) Limited access independent financial advice at no cost, and what should they consider when selecting a financial adviser to help them navigate their pension options?

Access to independent financial advice: PPG Industries covers the cost for one complete round of independent financial advice through WPS Advisory Limited. Employees should evaluate their adviser options, ensuring the selected adviser is registered and understands the specificities of the PPG pension plan​(PPG INDUSTRIES UK LIMIT…).

What critical information regarding pension tax allowances in 2024 should employees of PPG Industries (UK) Limited be aware of when making contributions to their pension scheme?

Pension tax allowances in 2024: Employees should be aware of the Annual Allowance, capped at £40,000, and the Lifetime Allowance, fixed at £1.0731 million. Contributions exceeding these limits may result in tax charges, making it essential to track contributions and consider tax implications when planning their pensions​(PPG INDUSTRIES UK LIMIT…).

How has the performance of the investment options within PPG Industries (UK) Limited's Defined Contribution (DC) section impacted member benefits, and what should employees consider when selecting their investment portfolios?

Impact of investment options in the DC section: The performance of the investment options, such as the new Aon Managed Global Impact Fund, can significantly affect employee benefits. Employees should assess their investment portfolios regularly to ensure they align with their risk tolerance and retirement goals​(PPG INDUSTRIES UK LIMIT…).

How can PPG Industries (UK) Limited employees contact the company for detailed inquiries regarding their pension plans, and what specific information should they be prepared to provide during this contact for efficient assistance?

Contacting the company for pension inquiries: Employees can contact the plan administrators at Aon via phone, email, or postal address. They should be prepared with their employee ID or member number, as well as personal information like date of birth, to ensure smooth communication​(PPG INDUSTRIES UK LIMIT…).

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