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Planning for a Century: How Graybar Electric Employees Can Navigate the Financial Landscape of a Longer Retirement

Jordi Visser monitors his heart rate daily. In addition, he monitors his breathing, tracks the quality of his sleep, and consumes a diet rich in fruits and vegetables. Visser, 56 years old, does not do this due to poor health. In contrast, he is focused on the future. His objective is a prosperous and active retirement spanning decades. In 2011, 54% of retirees believed they would not live as long as the average person of their age and gender. Only 31% reported a longer life expectancy than the population average.

According to a PlanAdviser article, 'The Society of Actuaries found that approximately 43% of retirees underestimate their own life expectancy by at least five years,' says Kate Beattie, senior retirement income strategist with Capital Group in Los Angeles. Everyone seems to be aware that Americans are living longer than ever before, except for investors.

'We are at the nexus of technology and longevity,' says Visser for a Barron’s article. Graybar Electric employees must note how the chief investment officer at Weiss Multi-Strategy Advisers also believes that in the coming decade, advances in medicine and technology may allow Americans to not only live longer but also healthier lives, as published in the Barron's article. Tom Brady is a prime example of something that was deemed impossible, according to Visser.

Brady, who recently announced his retirement from football at the age of 45, is, of course, in a class by himself. But Visser's point is unmistakable: the rest of us mere mortals may need to reevaluate our assumptions about what is achievable in our senior years and our investment strategy. Graybar Electric employees looking to retire should understand how a retirement that could last decades requires a portfolio designed for the long haul. Similarly, controlling your expenses while still enjoying your retirement may require a delicate balance.

Maintaining Stocks

Soon-to-be Graybar Electric retirees may benefit from considering an old rule of thumb for retirement investing: subtract your age from 100 to determine the proportion of your portfolio that should be invested in stocks. A 70-year-old should allocate 30% of his or her portfolio to stocks, according to this rule.

When a healthy adult has a chance of living to 100, this rule seems hopelessly obsolete. This 70-year-old must plan for the next 30 years, which necessitates remaining invested in equities to generate the growth necessary to combat inflation.

According to a Barron’s article, Pete Bush, an advisor at Cetera Financial Group and co-founder of Horizon Financial Group in Baton Rouge, states that equities are the long-term engine your portfolio requires.

“People typically believe, oh, I'm getting close to retirement. I should play it safe. They are contemplating retirement, not retirement itself,” he says.

Graybar Electric employees should consider how some 70-year-olds are actually as healthy as 50-year-olds. In light of this, Visser suggests that investors consider their biological age, which is essentially a measure of your health that may be vastly different from your chronological age. Scientists are developing accurate methods for determining biological age. Some of the techniques, such as analyzing saliva and blood samples, may appear fantastical. But Visser says there is a fundamental takeaway for investors: 'Your health should influence how you view your portfolio.'

For Graybar Electricemployees, identifying the optimal asset allocation is a piece of the puzzle. Bush advises investors to strike a balance between growth and value, pointing out that growth stocks have performed well over the past decade but poorly over the past year. In the coming years, international stocks may also outperform U.S. stocks, in stark contrast to the performance of the sector over the past decade. This is partially because European and Asian stocks are typically less expensive than American stocks. The asset manager Vanguard anticipates higher 10-year annualized returns for developed markets outside the United States, between 7.2% and 9.2%, than for U.S. markets, between 4.7% and 6.2%.

According to a Barron's article, Jeremy Altfeder, a financial advisor at Captrust, claims bonds can play an important role for income and security, especially now that interest rates are higher. 'Consider a client who spends $100,000 per year. Therefore, we require a year's supply of necessities. We could reserve $100,000 in Treasury bills.”

Altfeder mentions how investors can feel more at ease when they have sufficient funds set aside, sometimes as much as seven years' worth depending on the client. 'Laddering out Treasuries and other instruments is highly predictable,' he says. If you hold the bonds until maturity, you are aware of their yield.

Numerous financial advisors also recommend complex strategies involving alternative investments, trusts, and estate planning, depending on the individual's wealth, tax situation, desire to leave an inheritance to heirs or charity, and risk tolerance. The objective is to preserve this wealth, sometimes into the next generation.

A New Perspective on Work-Life Balance

Graybar Electric employees should consider how the possibility of living a longer, healthier life generates additional incentives to work longer and delay filing for Social Security. This will ensure a larger monthly benefit as you claim at a later age. These actions can increase your savings and provide your portfolio with additional time to grow before you begin withdrawing funds.

There are two additional ways for investors who need to save more to advance their retirement savings. First, the updated contribution limits established by the Internal Revenue Service permit investors to contribute up to $22,500 to their 401(k), 403(b), and other retirement plans in 2023, an increase from the previous limit of $20,500. People over the age of 50 can save up to an additional $7,500. New legislation is phasing in an increase in the age for required minimum distributions, or RMDs, from 72 to 75, which will benefit investors who are planning for a long retirement.

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Graybar Electric employees should keep in mind how they are not required to remain in their current position or even work full-time. Chip Munn, advisor and chief executive officer of Signature Wealth Strategies in Florence, South Carolina, has assisted clients in reorganizing their work so they are not in a hurry to retire. According to a Barron’s article, he claims 'Older workers have a great deal of value and leverage.' However, there may be no formal programs at your company to accommodate your desired schedule, so you may need to approach your employer and say, 'Hey, I don't want to retire, but I'd like to work part time.'

Additionally, there are benefits to being active. 'Those who are happiest and healthiest work longer but less,' he says.

Even for those who believe they have sufficient savings, early retirement can be riskier than you might expect. Graybar Electric employees should consider the story of Cyndi Hutchins, a Bank of America employee who witnessed this firsthand. Her grandmother retired at the age of 55 after a 41-year career.

'At that point, I began to think differently about retirement,' says Hutchins, director of financial gerontology in the retirement research and insights group of a bank. 'We anticipated a 10- to 15-year retirement. There were numerous factors that we had overlooked. She had a pension, but it was a small pension, and it was difficult to make it last for 41 years. Her family was ultimately required to contribute to her grandmother's living costs.'

From 1960 to 2015, life expectancy in the United States rose by nearly 10 years, from 69.7 to 79.4 years. According to a report from the 2020 Census Bureau, the average life expectancy is projected to increase by another 6.1 years between 2016 and 2060, reaching a record high of 85.6 years. Graybar Electric employees should also note how Americans are living longer than ever before. Almost one-fifth of the U.S. population is over 65 years old.

As a result of rising inflation and last year's weak stock and bond markets, it is not surprising that more people fear running out of money in old age. This includes individuals with substantial savings. According to a 2022 survey of high-net-worth investors conducted by Natixis Investment Managers, more than a third of millionaires believe that achieving a secure retirement 'will require a miracle.'

Graybar Electric employees should recognize how this anxiety is driving a surge in the demand for annuities, which are insurance contracts that guarantee a lifetime income. Frank Paré, founder of PF Wealth Management, has contemplated including a single premium immediate annuity, or SPIA, in the retirement plans of some clients. With an SPIA, an investor pays a lump sum to an insurance company, which then provides a lifetime income stream to the annuity owner. The payout of the annuity depends on several factors, including the age and gender of the owner.

However, there are a few exceptions, says Paré. First, fees may be considerable. Second, you must maintain a portion of your retirement funds in stocks, bonds, and other assets. 'You do not want to leave yourself without sufficient liquidity outside the SPIA,' Paré says.

Another concern with annuities is inflation. 'Your purchasing power will be in jeopardy if you don't have an inflation rider and inflation accelerates like it did last year,' Paré says.

For Graybar Electric employees considering an annuity, keep in mind that it's just one tool among many. 'I don't believe in silver bullets,' Paré says.

Expense Management

In addition to maximizing income, retirees of all wealth levels must monitor their budget and avoid major new expenses that require costly maintenance, such as a vacation home or new boat, as they enter retirement.

Graybar Electric employees should note how healthcare is the expense that retirees underestimate the most, particularly for healthy seniors who are fortunate enough to live a long life. According to a 2022 report by Fidelity Investments, a 65-year-old couple can anticipate spending an average of $315,000 on medical expenses during retirement. According to Fidelity, one of the nation's largest 401(k) providers, this estimate increased by 5% from 2021 and has nearly doubled since 2002, when it was $160,000.

In the first two decades of retirement, a healthy lifestyle can help keep costs down, but there are some factors that are beyond our control. Consider investing in a health savings account, which provides advantageous tax benefits, to help prepare for future medical expenses. 'If you can contribute to an HSA without using the funds to pay for current healthcare expenses, it's a fantastic way to save for long-term care,' says Hutchins of Bank of America.

For Graybar Electric employees, where you choose to live in retirement will have a significant impact on your expenses, so make this decision as soon as possible. Some Americans choose to relocate to states with warmer climates and cheaper living expenses. Consider whether your new community will be able to accommodate your future medical needs, in addition to your hobbies.

In retirement, the majority of Americans do not move or do not move very far. According to a 2021 AARP survey, approximately 75 percent of adults aged 50 and older intend to remain in their current residence for the foreseeable future. 'If you're healthy and active, it's simple to remain in your current home,' says Hutchins in the Barron’s article. 'As you age, consider whether your home is age-friendly.' She says that if you do not have a bathroom on the first floor, you should include the cost of this renovation in your financial plan.

The Key to Contentment

Perhaps most importantly, advisors and healthcare professionals agree that maintaining an active social life in retirement is the key to happiness. Obtain a hobby if you do not have one already. Donate time to a charity. Share a meal with friends.

For Graybar Electric employees, this recommendation may sound trite. Despite that, it has significant health benefits. The Harvard Study of Adult Development, which has been following a group of adults and their descendants for more than eighty-five years, has discovered that close personal connections are a key factor in both longevity and physical and mental health.

Isolation and loneliness, according to Bank of America's Hutchins, accelerate cognitive decline symptoms the quickest. 'You must continue to interact with others and ensure that your physical and emotional needs are met.'

Joseph Coughlin, director of the MIT AgeLab, recommends considering your lunch companions when planning for retirement. This determines not only the quality of your investment portfolio, but also the quality of your social portfolio. Do you have friends? If you retire and move, will you be able to locate them? 'It takes time to develop a strong friendship,' he says.

Ultimately, if you are going to live to be 100, you want to have close personal relationships and enough money to be worry-free.

What steps must an employee take to ensure they accurately calculate their pension benefits when planning for retirement under the Electricians Pension Plan, IBEW 995? Employees need to understand the various factors that contribute to benefit calculations, including years of service credits, age, and any early retirement reductions. Participants should also familiarize themselves with the formulas outlined in the plan regarding Normal Retirement and Early Retirement benefits.

Employees under the Electricians Pension Plan, IBEW 995 can ensure accurate pension calculations by reviewing the plan's formulas, which consider factors like service credits, age, and early retirement reductions. The plan provides specific calculation methods for Normal and Early Retirement pensions, so employees should refer to their accrued credits and apply the appropriate formula based on the years of service to get a precise benefit estimate(Electricians_Pension_Pl…).

How does the Electricians Pension Plan, IBEW 995, treat periods of active service compared to breaks in service when determining eligibility for pension benefits? Employees should be aware that their length of service is critical to establishing eligibility, and any periods identified as breaks in service may impact their pension status. Understanding the definition and implications of breaks in service can be vital for maximizing retirement benefits.

Service periods under the Electricians Pension Plan, IBEW 995 are critical for pension eligibility and accrual. Breaks in service, defined as periods where an employee is not credited with at least 250 hours in a plan year, can disrupt benefit accrual and participation. However, the plan provides grace periods for specific situations such as disability or maternity, preventing these gaps from affecting eligibility(Electricians_Pension_Pl…).

What are the implications of returning to work after starting to receive benefits under the Electricians Pension Plan, IBEW 995, and how can it affect ongoing pension payments? It's important for employees to recognize the conditions classified as "Disqualifying Employment" that can lead to suspending their pension benefits. Knowing how working while receiving benefits influences the plan can help retirees make informed decisions about their post-retirement employment.

Returning to work after starting to receive benefits under the Electricians Pension Plan, IBEW 995 can result in a suspension of benefits if the work qualifies as "Disqualifying Employment." Employees should check the plan’s definitions to see if their employment will affect their pension payments. Generally, working over 40 hours per month in covered employment or similar trades can trigger a suspension(Electricians_Pension_Pl…).

In what ways can an employee's spousal status influence the benefits they receive from the Electricians Pension Plan, IBEW 995? Employees need to understand how their marital status affects pension distributions, including survivor benefits and waivers. This knowledge is crucial for planning, as certain benefit structures depend significantly on whether the participant has a qualified spouse.

Spousal status significantly affects the distribution of benefits under the Electricians Pension Plan, IBEW 995. If an employee is married, the default pension option is the Joint and Survivor Annuity, which provides a continued payout to the spouse upon the participant’s death. The plan also outlines the necessary waivers and consents required for changing these benefits based on marital status(Electricians_Pension_Pl…).

How do changes in the Internal Revenue Service (IRS) regulations affect the contribution limits and benefit payouts related to the Electricians Pension Plan, IBEW 995? Employees should keep informed on the most current IRS guidelines, as they directly influence how benefits are calculated and dispersed. Awareness of IRS limits can prevent unexpected tax penalties and ensure compliance with pension law.

IRS regulations play an important role in determining contribution limits and payout structures under the Electricians Pension Plan, IBEW 995. Changes to IRS rules may affect the maximum allowable benefits and tax treatments. Employees should keep up to date with IRS guidelines to avoid potential tax penalties and ensure their pension plan remains in compliance(Electricians_Pension_Pl…).

What documentation is required for employees to maintain their eligibility for pension benefits under the Electricians Pension Plan, IBEW 995, especially after significant life events such as marriage, divorce, or disability? Employees must notify the plan office of life changes and provide necessary documentation. Understanding what these documents are and how they should be submitted is crucial for maintaining eligibility and accessing benefits.

Significant life events such as marriage, divorce, or disability require timely submission of documentation to the Electricians Pension Plan, IBEW 995 to maintain eligibility. This may include marriage certificates, divorce decrees, or proof of disability. Employees should contact the plan office to ensure all required paperwork is properly submitted to avoid interruptions in benefits(Electricians_Pension_Pl…).

What processes are in place for employees to appeal a denial of benefits under the Electricians Pension Plan, IBEW 995, and what timelines must they adhere to? Employees should be aware of their rights under ERISA concerning claims and appeals, including the time limits for submitting appeals. This knowledge ensures they are equipped to address any potential issues they may encounter during the pension claim process.

If a claim for benefits is denied, the Electricians Pension Plan, IBEW 995 provides an appeals process. Employees must file a written appeal within 60 days of receiving the denial notice. The appeal should include any relevant documentation, and employees should follow the timeline and procedures outlined in the plan to ensure proper consideration of their case(Electricians_Pension_Pl…).

How can employees determine if their employer is meeting its financial obligation to the Electricians Pension Plan, IBEW 995, particularly regarding contributions? Understanding the mechanisms for verifying employer contributions can help employees ensure that they are accruing the appropriate benefits. Employees should know whom to contact and what reports they can access to gather this information.

Employees concerned about their employer meeting its contribution obligations to the Electricians Pension Plan, IBEW 995 can contact the plan’s administrative office for verification. The plan allows participants to access contribution reports to confirm that employers are properly crediting their accounts(Electricians_Pension_Pl…).

What resources are available through the Electricians Pension Plan, IBEW 995, for employees seeking to enhance their understanding of their retirement options and benefits? Employees should seek detailed information provided through the plan documents and know how to access educational resources, such as workshops or one-on-one sessions with plan administrators. Utilizing available resources ensures they are making informed decisions about their retirement.

The Electricians Pension Plan, IBEW 995 offers various resources to help employees understand their retirement options. These include the plan’s summary description, workshops, and individual consultations with plan administrators. Employees should make use of these tools to gain a clear understanding of their pension and plan effectively(Electricians_Pension_Pl…).

How can employees contact the Electricians Pension Plan, IBEW 995, for additional questions or clarification regarding their retirement benefits or the plan's provisions? It is essential for employees to know how to reach the plan's administrative office or the Board of Trustees for inquiries. Understanding the contact methods, including phone numbers and office addresses, greatly aids in effective communication when navigating retirement planning. These questions are framed to guide employees in understanding their rights and responsibilities as they prepare for retirement under the Electricians Pension Plan, IBEW

For additional questions or clarification regarding the Electricians Pension Plan, IBEW 995, employees can contact the plan's administrative office at the provided phone number or address. The office offers support for all queries related to pension benefits, eligibility, and documentation(Electricians_Pension_Pl…).