How Intuit Employees Can Navigate the Impact of Inflation on Their Pension Choices

Healthcare Provider Update: Healthcare Provider for Intuit Intuit, a leading financial software company, primarily utilizes UnitedHealthcare as its healthcare provider. This partnership enables Intuit to offer competitive health benefits and services to its employees, ensuring comprehensive coverage options. Brief on Healthcare Cost Increases in 2026 In 2026, healthcare costs are anticipated to surge dramatically, with many insured individuals feeling the brunt of escalating premiums. Factors contributing to this sharp increase include the loss of enhanced federal subsidies for Affordable Care Act (ACA) marketplace plans, which has the potential to spike out-of-pocket costs by over 75% for the majority of enrollees. Additionally, numerous states are experiencing proposed premium hikes, with some exceeding 60%, primarily fueled by rising medical costs and aggressive rate increases from top insurers. As a result, consumers and employers alike will face significant financial pressures, prompting many to re-evaluate their healthcare options and strategies in light of these challenges. Click here to learn more

Rising interest rates also play a large role in the decision of whether Intuit employees should take their pension as an annuity or a one-time lump sum payment. As inflation continues to rise, the Fed has responded by gradually increasing interest rates, which decreases the value of future pension payments as well as the lump sum value. This is because the future pension payments are worth less today as the dollar devalues and the higher investment return drives the total present value of the payments down. To show this mathematically, imagine an individual with pension payments of $48,000 annually ($4,000 monthly), a 20-year time horizon, and a 5% interest rate

The present value of all of these payments is worth $598,186, which should roughly be the value of the lump sum payment. With a single percentage increase in interest rates from 5% to 6%, the new present value of the payments is reduced to $550,556, just under an 8% decrease over the old present value. Evidently, rising interest rates negatively affect the present value of future payments so given Federal Reserve Chairman Jerome Powell’s mention of 2-3 more interest rate hikes this year, the decision of whether to take a lump sum now or later could have a big impact on your retirement from Intuit.

'Taking your pension as a lump sum and knowing how to manage your funds to last for your retirement requires hard work.'

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In practicality, taking your pension as a lump sum and knowing how to manage your funds to last for your years of retirement from Intuit requires hard work. Figuring out how much to withdraw, when to withdraw, and how much you can spend each year are just a few of the many decisions that are needed to be thought out in order to maximize the benefit of taking your pension as a lump sum. If you don’t take the time to think out these decisions, you could find yourself running out of funds during your years of retirement from Intuit.

For our Intuit clients who would prefer the safety of a guaranteed stream of income for the rest of their lives, taking the annuity over the lump sum may be the better option for you. With taking your pension as an annuity though, there is no certainty that the company paying your pension will remain in business for the duration of your retirement so you run the risk of receiving smaller pension payments from the PBGC (Pension Benefit Guaranty Corporation) in the event that Intuit goes under. Both options have their pros and cons and in the end up to you to decide which suits your personal financial situation and lifestyle.

If you are interested in more information about this topic, view our e-book here:  https://retirekit.theretirementgroup.com/effects-of-inflation-e-brochure