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Deciding When to Retire: When Timing Becomes Critical Schneider National

For Schneider National 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 Schneider National 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:

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.
Retirement Planning: Some of the issues and strategies for people retiring from Schneider National companies, including when to claim Social Security benefits, how to manage health care costs, and when to move from savings to investments.
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 Schneider National 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 Schneider National means fewer working years and more savings. Moreover, the earlier you retire from Schneider National, 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 Schneider National 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 Schneider National 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 Schneider National 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 Schneider National 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 Schneider National is contributing to your account as well. For instance, if you work for Schneider National 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 Schneider National. 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 Schneider National. 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 Schneider National 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 Schneider National, 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 Schneider National 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 eligibility criteria for employees to participate in the Schneider Electric pension plan, and how do these criteria vary for salaried and hourly employees of Schneider Electric? In your answer, please elaborate on the implications of the different eligibility dates and any exceptions that may apply, such as coverage under collective bargaining agreements or participation in other retirement plans maintained by Schneider Electric.

Salaried and Hourly Employees: Eligible employees include those hired before January 1, 2006. Salaried employees become plan members the January 1 after joining the company if they are scheduled to work at least 17.5 hours per week, or if working less but completing 1,000 hours in a year. Hourly employees become members upon completing one hour of service. Exceptions: Employees hired or rehired after December 31, 2005, those covered under a collective bargaining agreement unless specified otherwise, and employees currently accruing benefits under another qualified company plan are ineligible.

How does the Schneider Electric pension plan calculate the monthly retirement benefit for participants, and what factors contribute to the final benefit amount? Discuss the importance of years of service, salary history, and the effect of any early or late retirement provisions on the final pension benefit.

The pension benefit for salaried employees is calculated using a formula considering years of benefit service, average monthly compensation, and covered compensation as of December 31, 2009. The benefit depends on the retirement age, chosen benefit payment form, and if benefits are received under another company plan. For hourly employees, the pension benefit is determined by the years of benefit service as of December 31, 2009, and a pension rate effective at that time.

What options are available for employees of Schneider Electric regarding spousal benefits under the pension plan, particularly if a participant passes away before or after retirement? In answering this question, detail how these options could affect survivors' financial stability and the importance of proper beneficiary designations during an employee's tenure at Schneider Electric.

Pre-Retirement: If an employee dies before pension payments start, the surviving spouse may receive a monthly death benefit at the employee’s normal retirement date, with payments potentially starting as early as the employee's 55th birthday. Post-Retirement: Joint and survivor annuity options are available, which provide continuing income to the spouse after the participant's death. The benefit amount is adjusted based on the selected payment option.

What procedures must be followed by Schneider Electric employees to initiate the retirement process and apply for pension benefits? Include in your discussion the timeframes and eligibility requirements for different retirement options, and highlight the consequences of failing to comply with these processes.

Employees must actively apply for pension benefits through the Schneider Electric Retiree Benefits Center. The application should be made close to the retirement date but no later than 90 days prior. The process includes choosing a payment method and, if applicable, obtaining spousal consent for certain payment options.

How does Schneider Electric ensure that benefits under its pension plan comply with the regulations set forth in ERISA, and what protections are offered to plan participants regarding benefit entitlement? Discuss the implications of these regulations and how they safeguard the interests of Schneider Electric employees.

The plan is designed to comply with the Employee Retirement Income Security Act (ERISA), offering protections like vesting rights and fiduciary standards to ensure benefit security. Participants are entitled to a fair process for benefit claims and appeals.

What steps can Schneider Electric employees take if their claim for pension benefits is denied, and what rights do they have under ERISA to appeal such denials? Explain the importance of understanding the claims review process and the role that documentation plays in successfully navigating benefits disputes.

If a pension claim is denied, participants can appeal the decision by following the process outlined in the plan document, which includes a review and potentially an adjustment of the claim.

How does the Schneider Electric pension plan handle the calculation of benefits for employees who were re-hired after a break in service? In addressing this question, explore the effect of prior service on future benefits and the rules governing vesting and accrual for these employees as stated in the plan.

Re-hired employees retain their previously earned benefits as of December 31, 2009, but they do not accrue additional benefits. If re-hired after a break and not fully vested, previous service may count towards vesting upon return, depending on the duration of the break in service.

What is the significance of the Pension Benefit Guaranty Corporation (PBGC) in the context of Schneider Electric's pension plan, and how does it provide an additional layer of security for employeesâ€™ retirement benefits? Discuss how the PBGC's involvement affects participantsâ€™ perceptions of the safety and reliability of their pension benefits.

PBGC provides an insurance backstop that guarantees continuous payment of earned pension benefits up to legal limits in the event the plan fails financially, enhancing the security of the pension for employees.

What considerations must employees of Schneider Electric keep in mind when planning for early retirement, especially concerning the benefit reduction factors that apply? Elaborate on how consistent planning and understanding of these factors can influence an employeeâ€™s financial readiness for retirement.

Employees can elect early retirement beginning at age 55 with at least 10 years of vesting service. However, benefits are reduced based on how early the retirement starts relative to the normal retirement age.

How can Schneider Electric employees contact the company to obtain more information about the pension plan and retirement benefits? Detail the available resources, including specific contact numbers and web links, ensuring that employees know where to direct their inquiries regarding the Schneider Electric pension plan.

Employees can contact the Schneider Electric Retiree Benefits Center at 1-800-964-8843 for information about their pension plan and benefits, or access details online at the provided portal.