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6 Retirement Myths Every Celanese Employee Should Not Fall For!
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With crude oil volatility near 80% and prices spanning $50 to $120 per barrel over the past six months, energy cost uncertainty influences economic conditions across industries. The chemicals industry faces dual exposure as oil serves both as an energy cost and a primary feedstock for production. Celanese employees building long-term savings should recognize that oil-driven economic conditions can affect both the growth of their portfolios and the purchasing power of their eventual retirement income. Consulting with a financial advisor can help you understand how energy conditions affect your specific situation and build a plan that adapts accordingly.
During our 30+ years helping retirees, the majority have been very excited to start the planning process. However, some have been surprised to find out our recommendations differ from what they have heard elsewhere.
This is because there’s a lot of misinformation swirling around. As a fiduciary, we are legally obligated to serve your best interests at all times. So, we can tell you achieving the retirement you desire is not going to happen if you’re sidetracked by myths and false information.
That's why we aim to debunk the top six retirement myths that Celanese employees may have heard. Our goal is to help you start building the retirement of your dreams today.
Myth #1: If I receive a pension, I do not have to make any decisions regarding my pension.
If Celanese offers you a defined-benefit plan, your pension is primarily the responsibility of the company. However, that doesn’t mean you just wait for a check in the mail once you retire. You have major decisions to make.
If offered a pension, employees can potentially elect to receive a monthly payout like a traditional pension or they could convert their pension into a one-time lump-sum benefit, which can be subsequently rolled over into an Individual Retirement Account (IRA) and then controlled by the retiree.
So, monthly or lump-sum pension?
Each payout has its own set of pros and cons. Deciding which option is most appropriate for you involves many factors. Deciding which option is most appropriate for you involves many factors. It is best done with the help of a professional, who can incorporate all aspects of your financial life – Social Security, 401(k), real estate, and inheritance into your decision.
Further, married Celanese employees may have survivor benefit options to consider. At retirement, it is possible that you have multiple survivor options to choose from for the monthly pension, but these are only available for a qualified spouse.
Myth #2: If I receive a pension from Celanese , Social Security becomes less important.
Social Security will likely be one of your primary sources of retirement income. And just like your pension, you should carefully consider how best to use it based on your personal needs.
The size of your Social Security benefit is greatly determined by your age when you claim. You can receive your full Social Security retirement benefit upon reaching your Full Retirement Age, which is age 66 or 67, depending on your date of birth. But you can claim a permanently reduced benefit as early as age 62. Delaying Social Security until age 70 entitles you to a higher benefit of up to 8% per year. A benefit at age 70 will be 76-77% higher than the payout if you start at age 62.
Ultimately, factors such as your other income sources, marital status and health should guide your decision, not just when you can get the biggest Social Security paycheck.
Myth #3: When I retire from Celanese doesn’t matter
No, no, no. When you retire has a major effect on the quality of your retirement.
For one, years of service is one of the primary factors in your pension calculation. Generally, the longer you work at Celanese, the higher your pension. Your pension is also impacted by interest rates, which fluctuate. When rates are lowered, lump-sum pension payouts are increased, and vice versa.
Plus, Celanese retirement benefits are not set in stone. They are subject to change. For example, the significant changes made to Celanese’s pension calculation, health care subsidies and retiree health insurance.
You may find that it is more financially advantageous to retire sooner or later than your desired retirement date.
Myth #4: Celanese stock is a good investment
Something Celanese employees should be aware of is that we commonly see employees invest an excessive amount of their 401(k) in their company’s stock. While it can be rewarding to own a piece of a respected company, it may be risky from a retirement planning perspective.
Firstly, most of your financial life becomes dependent on the performance of one company. That includes your current income and retirement income from the Celanese pension and 401(k) plan (if Celanese offers these to you). Such a high concentration of your financial well-being in a single company is risky. Secondly, a single stock can be riskier and more volatile than a mutual fund or the broader stock market. Therefore, the greater amount of Celanese stock you have in your 401(k), the more you can expect your investment return to fluctuate.
It’s more appropriate to diversify the investment choices in your Celanese 401(k) account (If Celanese offers you a 401K). That means selling your company stock and investing in mutual funds. The right mix of funds depends on your specific needs, goals and level of risk you’re comfortable with.
Myth #5: It’s better to leave my 401(k) with my company.
Upon leaving Celanese, you may leave some or all of your savings in your Celanese 401(k) account (If this is offered to you). However, there are a variety of benefits to rolling over your 401(k) to an Individual Retirement Account (IRA). These include greater investment choices, greater withdrawal flexibility, more withholding options, and professional management by an advisor of your choosing.
When done properly, no tax applies to the rollover. One area of your 401(k) that provides no flexibility is tax withholdings.Every withdrawal is subject to a mandatory 20% federal tax plus applicable state taxes.
Myth #6: Medicare will cover my medical expenses
One of the biggest expenses for most people in retirement is health care. Taking the time to review your options can help you plan accordingly and avoid large out-of-pocket costs that could derail your retirement.
Once you turn 65 you are Medicare-eligible You and your Medicare-eligible dependents are required to enroll in Medicare Part A (hospital benefits) and Part B (doctor benefits). These two parts cover about 80% of health care benefits for individuals, so it’s important to consider your supplemental coverage options.
That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Celanese. Celanese's defined benefit pension is closed to new entrants but continues accruing for legacy employees enrolled before the closure. If you joined Celanese before the plan closed, your pension continues to grow with additional service. If you joined after the closure, your retirement income at Celanese rests primarily on your 401(k) and Social Security. Celanese may offer a 401(k) employer match - review your Summary Plan Description for current match rate and vesting details.
On the healthcare side, Celanese provides continued medical coverage to eligible retirees, which can bridge the gap between retirement and Medicare eligibility at age 65 or serve as a supplement to Medicare thereafter. Confirming the service and age requirements for retiree coverage, and understanding your premium contribution, is an important step in building an accurate healthcare cost projection. Coordinating Celanese's retiree coverage with Medicare Part B and Part D enrollment timing can also reduce duplication and avoid late-enrollment penalties. Connecting your specific Celanese benefits situation to a comprehensive retirement income plan - and understanding how each component interacts - gives you the most complete picture of what retirement will look like.
What is the purpose of the 401(k) Savings Plan at Celanese?
The purpose of the 401(k) Savings Plan at Celanese is to help employees save for retirement by allowing them to contribute a portion of their salary on a pre-tax or after-tax basis.
How does Celanese match employee contributions to the 401(k) Savings Plan?
Celanese offers a matching contribution to the 401(k) Savings Plan, where the company matches a percentage of employee contributions, helping to maximize retirement savings.
What types of investments are available in Celanese's 401(k) Savings Plan?
Celanese's 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.
Can Celanese employees change their contribution percentage to the 401(k) Savings Plan?
Yes, Celanese employees can change their contribution percentage to the 401(k) Savings Plan at any time, subject to the plan's guidelines.
What is the vesting schedule for Celanese's 401(k) Savings Plan?
The vesting schedule for Celanese's 401(k) Savings Plan dictates how long employees must work for the company before they fully own the employer's matching contributions.
When can Celanese employees start contributing to the 401(k) Savings Plan?
Celanese employees can typically start contributing to the 401(k) Savings Plan after completing a certain period of employment, often within their first few months.
Does Celanese allow for loans against the 401(k) Savings Plan?
Yes, Celanese allows employees to take loans against their 401(k) Savings Plan balance, subject to specific terms and conditions outlined in the plan.
How can Celanese employees access their 401(k) Savings Plan account information?
Celanese employees can access their 401(k) Savings Plan account information through the company’s designated retirement plan website or by contacting the plan administrator.
Are there any fees associated with Celanese's 401(k) Savings Plan?
Yes, there may be fees associated with Celanese's 401(k) Savings Plan, which can include administrative fees and investment management fees, as outlined in the plan documents.
What happens to a Celanese employee's 401(k) Savings Plan if they leave the company?
If a Celanese employee leaves the company, they have several options regarding their 401(k) Savings Plan, including rolling it over to another retirement account, cashing it out, or leaving it with Celanese.
For more information you can reach the plan administrator for Celanese at 222 W. Las Colinas Blvd. Irving, TX 75039; or by calling them at +1 972-443-4000.
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