New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Crafting Your Ideal Retirement Income Plan: A Guide for Penske Automotive Group Employees

Healthcare Provider Update: Healthcare Provider for Penske Automotive Group Penske Automotive Group employees typically receive healthcare coverage through a variety of providers depending on their specific plan selections, with major national insurers like Kaiser Permanente, UnitedHealthcare, and Anthem BlueCross BlueShield being among the options available. The exact provider often varies by location and the specific plan chosen during open enrollment. Healthcare Cost Projections for 2026 The healthcare landscape is set for significant upheaval in 2026, with potential premium hikes expected to exceed 75% for many Affordable Care Act (ACA) marketplace enrollees, largely due to the expiration of enhanced federal subsidies. Penske Automotive Group employees, particularly those nearing retirement, may face steep increases in their healthcare costs as insurers respond to rising medical expenses and price inflation. With the ACA marketplace seeing some state requests for premium increases reaching as high as 66%, careful financial planning will be essential for employees heading into another challenging year in healthcare affordability. Click here to learn more

It's important for you to be involved in the retirement income planning process even

if you're married. While you may plan to be married forever, many women

end up single at some point in their lives due to divorce or death of a spouse.

More women are working and taking charge of their own retirement planning than ever before. What does retirement from Penske Automotive Group mean to you? Do you dream of traveling? Pursuing a hobby? Volunteering your time, or starting a new career or business? Simply enjoying more time with your grandchildren? Whatever your goal, you'll need a retirement income plan that's designed to support the retirement lifestyle that you envision, and minimize the risk that you'll outlive your savings.

When Will You Retire From Penske Automotive Group?

Establishing a target age is important because the time at which you retire from Penske Automotive Group will significantly affect how much you need to save. For example, if you retire from Penske Automotive Group early at age 55 as opposed to waiting until age 67, you'll shorten the time you have to accumulate funds by 12 years, and you'll increase the number of years that you'll be living off of your retirement savings. We'd also like our Penske Automotive Group clients to consider:

The longer you delay your retirement from Penske Automotive Group, the longer you can build up tax-deferred funds in your IRAs and Penske Automotive Group-sponsored plans such as 401(k)s, or accrue benefits in a traditional pension plan if you're lucky enough to be covered by one.
Medicare generally doesn't start until you're 65. Does Penske Automotive Group provide post-retirement medical benefits? Are you eligible for coverage if you retire early from Penske Automotive Group? Do you have health insurance coverage through your spouse's employer? If not, you may have to look into COBRA or a private individual policy — which could be expensive.
You can begin receiving your Social Security retirement benefit as early as age 62. However, your benefit may be 25% to 30% less than if you waited until full retirement age. Conversely, if you delay your Penske Automotive Group retirement past full retirement age, you may be able to increase your Social Security retirement benefit.
If you work part-time during retirement, you'll be earning money and relying less on your retirement savings, leaving more of your savings to potentially grow for the future (and you may also have access to affordable health care).
For our Penske Automotive Group clients who are married, and you and your spouse are both employed and nearing retirement age, think about staggering your retirements. If one spouse is earning significantly more than the other, then it usually makes sense for that spouse to continue to work in order to maximize current income and ease the financial transition into retirement.

How Long Will Retirement Last When You Leave Penske Automotive Group?

We all hope to live to old age, but a longer life means that you'll have even more years of retirement to fund. The problem is particularly acute for women, who generally live longer than men. To guard against the risk of outliving your savings, you'll need to estimate your life expectancy. You can use government statistics, life insurance tables, or life expectancy calculators to get a reasonable estimate of how long you'll live. Experts base these estimates on your age, gender, race, health, lifestyle, occupation, and family history. But it's important for these Penske Automotive Group clients to remember that these are just estimates. There's no way to predict how long you'll actually live, but with life expectancies on the rise, it's probably best to assume you'll live longer than you expect.

Project Your Retirement Expenses

Once you know when your retirement from Penske Automotive Group will likely start, how long it may last, and the type of retirement lifestyle you want, it's time to estimate the amount of money you'll need to make it all happen. One of the biggest retirement planning mistakes you can make is to underestimate the amount you'll need to save by the time you retire from Penske Automotive Group. It's often repeated that you'll need 70% to 80% of your pre-retirement income after you retire. However, the problem with this approach is that it doesn't account for your specific situation.

Focus on your actual expenses today and think about whether they'll stay the same, increase, decrease, or even disappear by the time you retire from Penske Automotive Group. While some expenses may disappear, like a mortgage or costs for commuting to and from work, other expenses, such as health care and insurance, may increase as you age. If travel or hobby activities are going to be part of your retirement, be sure to factor in these costs as well. And don't forget to take into account the potential impact of inflation and taxes.

Identify Your Sources of Income

Once you have an idea of your retirement income needs, your next step is to assess how prepared you (or you and your spouse) are to meet those needs. In other words, what sources of retirement income will be available to you? Penske Automotive Group may offer a traditional pension that will pay you monthly benefits. In addition, you can likely count on Social Security to provide a portion of your retirement income. Other sources of retirement income may include a 401(k) or other retirement plan, IRAs, annuities, and other investments.

The amount of income you receive from those sources will depend on the amount you invest, the rate of investment return, and other factors. Finally, if you plan to work during your retirement from Penske Automotive Group, your earnings will be another source of income. When you compare your projected expenses to your anticipated sources of retirement income, you may find that you won't have enough income to meet your needs and goals. Closing this difference, or 'gap,' is an important part of your retirement income plan. In general, if you face a shortfall, you'll have five options: save more now, delay your Penske Automotive Group retirement or work during retirement, try to increase the earnings on your retirement assets, find new sources of retirement income, or plan to spend less during retirement.

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Transitioning Into Retirement

Even after that special day comes, you'll still have work to do. You'll need to carefully manage your assets so that your retirement savings will last as long as you need them to.

We suggest that our Penske Automotive Group clients review their portfolios regularly. Traditional wisdom holds that retirees should value the safety of their principal above all else. For this reason, some people shift their investment portfolio to fixed-income investments, such as bonds and money market accounts, as they enter retirement. The problem with this approach is that you'll effectively lose purchasing power if the return on your investments doesn't keep up with inflation. While it generally makes sense for your portfolio to become progressively more conservative as you grow older, it may be wise to consider maintaining at least a portion in growth investments.
Spend wisely. You want to be careful not to spend too much too soon. This can be a great temptation, particularly early in retirement. A good guideline is to make sure your annual withdrawal rate isn't greater than 4% to 6% of your portfolio. (The appropriate percentage for you will depend on a number of factors, including the length of your payout period and your portfolio's asset allocation.) Remember that if you whittle away your principal too quickly, you may not be able to earn enough on the remaining principal to carry you through the later years.
Understand your retirement plan distribution options. Most pension plans pay benefits in the form of an annuity. For our Penske Automotive Group clients who are married, you generally must choose between a higher retirement benefit that ends when your spouse dies or a smaller benefit that continues in whole or in part to the surviving spouse. A financial professional can help you with this difficult, but important, decision.
Consider which assets to use first. For many retirees, the answer is simple in theory: withdraw money from taxable accounts first, then tax-deferred accounts, and lastly, tax-free accounts. By using your tax-favored accounts last and avoiding taxes as long as possible, you'll keep more of your retirement dollars working for you. However, we'd like to remind our Penske Automotive Group clients that this approach isn't right for everyone. And don't forget to plan for required distributions. You must generally begin taking minimum distributions from Penske Automotive Group retirement plans and traditional IRAs when you reach age 72, whether you need them or not. Plan to spend these dollars first in retirement.*
Consider purchasing an immediate annuity. Annuities are able to offer something unique — a guaranteed income stream for the rest of your life or for the combined lives of you and your spouse (although that guarantee is subject to the claims-paying ability and financial strength of the issuer). The obvious advantage in the context of retirement income planning is that you can use an annuity to lock in a predictable annual income stream, not subject to investment risk, that you can't outlive.** Unfortunately, there's no one-size-fits-all when it comes to retirement income planning. A financial professional can review your circumstances, help you sort through your options, and help develop a plan that's right for you.

According to the Society of Actuaries, in 2019, a 65-year-old woman in excellent health has a 53% chance of living to age 90, compared to a 42% chance for a similarly healthy man. *Due to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, required minimum distributions (RMDs) are waived in 2020. **Generally, annuity contracts have fees and expenses, limitations, exclusions, holding periods, termination provisions, and terms for keeping the annuity in force. Most annuities have surrender charges that are assessed if the contract owner surrenders the annuity.

What are the specific eligibility criteria for participation in the Penske Cash Balance Plan, and how can employees of Penske ensure they meet these requirements as they work towards retirement? Furthermore, how does the plan address the transition from being a participant to receiving benefits once the eligibility criteria are met?

Eligibility Criteria: Employees of Penske automatically become participants in the Penske Cash Balance Plan after completing a year in which they work 1,000 or more hours, as long as they are in an eligible group. To ensure they meet the eligibility requirements, employees should confirm they meet these conditions annually and consult the Summary Plan Description for details(Penske Cash Balance Pla…).

In what ways does the Penske Cash Balance Plan differentiate itself from traditional defined contribution plans, and how can employees of Penske navigate the choices available to them, including lump sum distributions and annuities? Additionally, what implications do these options have for long-term financial planning for retirement?

Plan Differences: The Penske Cash Balance Plan is a defined benefit plan, offering benefits similar to a defined contribution plan but providing additional options like lump-sum distributions and annuities. Employees should carefully evaluate these options, as lump sums provide immediate access to funds, while annuities ensure steady long-term payments. Both choices impact long-term financial stability(Penske Cash Balance Pla…).

How does the concept of vesting apply to the Penske Cash Balance Plan, and what are the steps that employees of Penske should take to ensure they understand their rights to these benefits prior to retirement? Furthermore, what resources are available to help employees fully grasp the nuances of vesting in relation to their individual situations?

Vesting: Vesting refers to an employee's right to receive benefits even if they leave Penske before retirement. Employees must meet specific requirements to become vested, and they can consult the Brief Plan Summary to fully understand their rights(Penske Cash Balance Pla…).

What mechanisms does the Penske Cash Balance Plan have in place to ensure that employees can trust they will receive their benefits? How does this assurance interact with projected benefits and calculations provided through DB Online, and what should employees of Penske do if they have concerns about the accuracy of their benefit estimates?

Benefit Assurance: Benefits from the Penske Cash Balance Plan are paid from a trust fund established by the company and insured by the Pension Benefit Guaranty Corporation (PBGC). Employees can rely on the trust fund and the PBGC for benefit security, and should contact the Customer Contact Center if they have concerns about benefit estimates(Penske Cash Balance Pla…).

How are pension benefits from the Penske Cash Balance Plan typically taxed, and what strategies can employees of Penske implement to manage tax implications effectively during their retirement planning? Moreover, what are the possible ways to minimize taxes on lump sum distributions compared to annuity payments?

Taxation: Benefits from the Penske Cash Balance Plan are generally taxed as ordinary income. Employees can manage taxes effectively by rolling over lump-sum distributions to an IRA to defer tax payments. Careful consideration of lump sums versus annuities can minimize taxes over time(Penske Cash Balance Pla…).

What are the various forms of payment options available under the Penske Cash Balance Plan, and how should employees of Penske evaluate their choices regarding life annuities versus lump sum payments? Additionally, how do these payment options affect short-term and long-term financial stability in retirement?

Payment Options: Employees can choose between lump-sum payments and various types of annuities. Evaluating these options is essential for balancing short-term and long-term financial goals, as lump sums offer immediate liquidity, while annuities provide lifetime payments(Penske Cash Balance Pla…).

In the event of a divorce or separation, what specific procedures must employees of Penske follow to protect their pension benefits, and how does a Qualified Domestic Relations Order (QDRO) impact these benefits? What guidance does the Penske Cash Balance Plan provide to ensure that the division of assets is conducted appropriately?

Divorce and QDRO: In the event of a divorce, employees must obtain a Qualified Domestic Relations Order (QDRO) to divide their pension benefits. This court order ensures that the division is legally recognized, and employees should refer to plan procedures for guidance(Penske Cash Balance Pla…).

How can employees of Penske prepare for the multitude of decisions they need to make as they approach retirement, and what resources does the company offer to assist in this decision-making process? Additionally, how do the various teams and services provided by Penske streamline the retirement transition for its employees?

Retirement Preparation: Penske offers specialized retirement counseling and customer support services to help employees navigate retirement decisions. These resources can assist employees in making informed choices and smooth their transition into retirement(Penske Cash Balance Pla…).

What are the major types of annuities offered by the Penske Cash Balance Plan, and how should employees of Penske assess the suitability of these annuity options for their personal retirement needs? What does the company recommend in terms of beneficiaries and their implications for future payments from the plan?

Annuity Options: Penske offers various annuities, including life annuities and joint survivor annuities. Employees should assess these based on their personal needs and consult the company for recommendations regarding beneficiaries to ensure future payments are secure(Penske Cash Balance Pla…).

How can employees of Penske contact the company to inquire further about the Penske Cash Balance Plan and its intricacies? What methods of communication are available, and what information should employees gather beforehand to make their inquiries as productive as possible?

Contact Information: Employees can contact the Penske Cash Balance Plan administrators by calling 1-800-755-5801 for further inquiries. It's advisable to have all relevant documents and questions prepared in advance to make the discussion more productive(Penske Cash Balance Pla…).