Navigating Your Retirement Options: A Comprehensive Guide for Kemper Employees on 401(k), Social Security, and Pension Choices

I am aware many of you are at a significant cross-road in life….. either voluntarily or involuntarily, may be leaving Kemper

There are several options that you may come across, along with a list of questions you may have when that time comes.

With varying topics to go over when you're retiring, communicating with an adviser who can recommend you solid advice on how to proceed for life after Kemper has many benefits. As a retiree, you will need to prepare for the collection on pension, 401K, and social security. With the guidance of a financial adviser, you will be able to understand how to choose the best route for your cash-balance pension, 401K, individual IRA, etc.

Should I keep my options open as a Kemper re-hire?
Should I leave my money in the Kemper 401K plan? Why or why not?
What are the benefits to an individual IRA?
If I roll the money over, will I need to pay taxes?
How can I get more money into a Roth IRA or at least get Roth-IRA style tax benefits?
What are some steps I can take to maximize my retirement income?
How can I stabilize my retirement income, and be sure it doesn’t run out?
Should I take my cash balance pension, or leave it in the Kemper Pension Plan? And why?
What do I need to know about Social Security?
How best can I protect my spouse but not decrease my Pension Payout via the survivor benefit?

What's tough about these is that every situation is unique and quite different. Simply put, there is no “one size fits all” plan. There is truly no way to tell if your current financial guidance is really the best. As folks pay for planning services (fees based), their willingness to seek a 2nd opinion evaporates as they have already placed an initial investment in. They won't want to spend additional money to get a 2nd opinion which will inhibit them from comparing the advice they receive.

Good planning — or any planning — will always be better than none. But, an effective plan isn’t simply developed and then placed on auto pilot. You need to continuously reassess your decisions and direction.

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This theory is particularly relevant during big “transitions” in life. These would include getting a new job, leaving a job, retiring, the death of a loved one, kids leaving home, etc.

We understand these topics can be confusing and extensive. If you currently don’t have anyone to help run down your options, tax implications, and pros and cons of either your existing strategy OR if you simply just need a “2nd opinion” on your existing plan or planner, please let me know here so that I can reach out to current clients or referrals to assist you.

Your finances will inevitably be squeezed without the certainty of a regular income and any form of financial assistance can lower stress levels. Run a cash flow projection and budget before you leave the company to determine how to leave. Get a free consultation from an adviser who have years of experience servicing Kemper employees.

The first step is to run a cash flow to determine an adequate income. The cash flow will assist you in determining how to take severance. When receiving a pension, a cash flow will determine how much money you need to make to supplement the monthly retirement annuity. Take into mind, for a lot of people, it is recommended relocating for a year or two to reach your Mod-75. For more information on the Mod-75, take a look here. One of the costliest mistakes many people make is not relocating.

After running a cash flow, begin to construct your budget. First, make a list of your major household expenses (mortgage, rent payments, utility bills, etc.). Next, jot down all of your assets and sources of income (severance pay, unemployment benefits, savings, food stamps, and so on). Lastly, adapt your budget to fit with your new circumstances.

Trim any unnecessary outgoings, develop a plan for spending less, and consider contacting creditors to refinance your mortgage or reschedule any repayment plans. (You may be able to take a mortgage “payment holiday” in the short term.)

Knowing how much time your resources will allow you for job hunting can help you to keep stress and anxiety in check. After all, having time can be the difference between rushing to take the first mediocre job you can find, and finding a satisfying job that you’ll love. With a guide of a financial advisor, see if your severance can give you extended time to look for another job.

You may also need to consider taking on temporary or freelance work to bring in short-term cash. Keep this in mind, and look into it in the first few days after your departure.

We understand that this can be an emotional time, but remember, there's always light at the end of the tunnel.

What is the purpose of Kemper's 401(k) plan?

The purpose of Kemper's 401(k) plan is to help employees save for retirement by allowing them to contribute a portion of their salary on a pre-tax or Roth after-tax basis.

How can employees enroll in Kemper's 401(k) plan?

Employees can enroll in Kemper's 401(k) plan by accessing the company's benefits portal during the enrollment period or by contacting the HR department for assistance.

Does Kemper offer a company match for 401(k) contributions?

Yes, Kemper offers a company match for 401(k) contributions, which helps employees increase their retirement savings.

What types of investment options are available in Kemper's 401(k) plan?

Kemper's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

Can employees change their contribution rate to Kemper's 401(k) plan?

Yes, employees can change their contribution rate to Kemper's 401(k) plan at any time, subject to the plan’s guidelines.

What is the vesting schedule for Kemper's 401(k) company match?

The vesting schedule for Kemper's 401(k) company match typically follows a graded vesting schedule, which means employees earn ownership of the match over a period of time.

Are there any fees associated with Kemper's 401(k) plan?

Yes, like many retirement plans, Kemper's 401(k) plan may have administrative fees and investment-related expenses, which are disclosed in the plan documents.

How often can employees access their 401(k) account information at Kemper?

Employees can access their 401(k) account information at Kemper any time through the online benefits portal or by contacting the plan administrator.

What happens to my Kemper 401(k) if I leave the company?

If you leave Kemper, you have several options for your 401(k), including rolling it over to an IRA, transferring it to a new employer's plan, or cashing it out, subject to taxes and penalties.

Can employees take loans against their Kemper 401(k) plan?

Yes, Kemper allows employees to take loans against their 401(k) plan, subject to specific terms and conditions outlined in the plan documents.

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

Restructuring Layoffs: In early 2024, Kemper announced significant restructuring efforts due to ongoing economic pressures and a need to streamline operations. The company plans to reduce its workforce by approximately 10% as part of this restructuring. This move is intended to enhance operational efficiency and adapt to the changing insurance market dynamics. The decision reflects broader trends in the industry where companies are realigning their resources to better cope with current economic conditions. Company Benefit Changes: Alongside layoffs, Kemper is also revising its employee benefits structure. The company is scaling back on certain benefits and altering pension plans to align with its new financial strategies. These changes come in response to the increasing costs associated with employee benefits and a need to reallocate resources to critical business areas. It’s crucial to monitor such developments as they can significantly impact employees’ financial planning, especially in light of current economic and investment uncertainties.

Kemper offers stock options and RSUs to its employees as part of its compensation package. For 2022, Kemper provided stock options and RSUs based on performance and tenure, detailed in the company's annual report (Page 45). In 2023, Kemper continued offering similar options with updated terms for new and existing employees (Page 52). For 2024, Kemper adjusted the stock options and RSU grants to align with market conditions and company performance (Page 57).

Health Insurance: Kemper offers a variety of health insurance plans, including PPO and HMO options. Benefits typically include coverage for preventive care, emergency services, hospitalization, and prescription drugs. Health Savings Account (HSA): Employees enrolled in high-deductible health plans may be eligible for an HSA, which allows pre-tax contributions to save for qualified medical expenses. Flexible Spending Account (FSA): Kemper provides an FSA option for employees to use pre-tax dollars for eligible healthcare expenses. Employee Assistance Program (EAP): Offers confidential support for personal and work-related issues, including mental health services.