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Healthcare Provider Update: Healthcare Provider for Cummins Inc. Cummins Inc. primarily administers its employee health benefits through major insurance providers, including UnitedHealthcare and Anthem Blue Cross Blue Shield (BCBS), among others. Potential Healthcare Cost Increases in 2026 As Cummins Inc. anticipates significant healthcare cost increases in 2026, employees should prepare for potential spikes in premiums driven by a combination of factors. A projected rise of up to 8.5% in employer-sponsored insurance costs, alongside the potential expiration of enhanced ACA subsidies, may lead many employees to see their out-of-pocket expenses grow considerably. With certain states experiencing premium hikes exceeding 60%, comprehensive financial planning, including the strategic use of Health Savings Accounts (HSAs), will become essential for mitigating the anticipated financial impact on individuals and families. Click here to learn more
Fixed-income investing can provide an income stream to protect capital and provide financial independence for Cummins Inc employees looking to retire comfortably, said Wesley Boudreaux, of The Retirement Group, a division of Wealth Enhancement Group.
'As more Cummins Inc employees live longer than expected, an advisor can help you secure the income needed to fund a long retirement through instruments such as bonds and annuities,' said Patrick Ray of The Retirement Group, a division of Wealth Enhancement Group.
In this article we will discuss:
1. Creating streams of income for retiring Cummins Inc employees.
2. Fixed-income investments include bonds, municipal bonds and preferred stock.
3. Work with a financial advisor to understand investments for retirement income.
Because many Cummins Inc employees get more years in retirement, retirees have to carve out streams of income with which to live. That's the goal of investing for income - having enough income to cover your expenses so you can avoid tapping into your principal retirement savings. As a Cummins Inc employee, investing for income may be less risky than investing for growth through traditional stock market investments. It's because fixed-income investing aims to help you as a Cummins Inc employee preserve your capital so you can draw down ongoing income in interest or dividend form.
That's what makes investing for income a viable option for Cummins Inc employees and retirees who like knowing what their investments will provide for them in the future. With this basic understanding of how investing for income can put you on the path to a more predictable retirement outcome than most traditional stock market-based plans can promise, let's look at 11 different ways you can invest for income. Most fixed-income investments are bonds. These have a set amount of interest to pay and a fixed amount to be paid back at maturity, called the par value. What comes to mind first when people think about investing in bonds is government bonds.
Those government bonds are debt securities issued by a government to fund government spending. They're issued by national governments and are considered low risk because they're backed by the government issuing the bonds. One example is a United States debt security backed by the United States. The U.S. Treasury Department also issues U.S. Treasury Bonds. U.S. Treasury Bonds are long-term bonds that mature in 10 to 30 years. But what if you're not a Cummins Inc employee who wants to hang your cash for more than 10 years?
So there we have the second way to invest for income:
U.S. Treasury Notes. U.S. Treasury Notes are another type of debt security that the U.S. government issues to fund government spending. The loan also has an advertised interest rate, payable semi-annually until maturity. U.S. Treasury notes are offered at two-, three-, five-, seven- and 10-year terms.
For the Cummins Inc employee:
If you think that's still too long to tie up your money, then item # 3 on our list may be for you. U.S. Treasury Bills are short-term debt obligations backed by the United States Treasury Department for terms of one year or less. They come in one, three, six and 12 month maturities. Because they have shorter terms, they will generally charge less interest than the two other options we discussed. We think those are reasonable short-term investments for Cummins Inc employees and retirees. What if you want U.S. government bonds? As a Cummins Inc employee, maybe you want to put your money where it counts - in something local - that will help local governments with government projects. Look next if that's the case. Municipal bonds are debt securities issued by state and local governments to fund public works and are used mainly to build or improve parks, roads, bridges, libraries or other infrastructure. As a Cummins Inc employee, municipal bonds can help preserve capital while earning interest. Some municipal bonds pay no federal taxes and some are tax-free at the state and local levels as well. But interest earned on municipal bonds could affect your social benefits and the tax you might owe on those benefits.
That's why you as a Cummins Inc employee should work with a financial advisor who understands retirement planning and saving before you invest in such securities. As a Cummins Inc employee you need to know that corporate bonds are debt securities that corporations issue to raise money for ongoing operations, mergers and acquisitions or to expand their business. The term corporate bond is used for debt instruments issued by a corporation with at least one year maturities. Corporate bonds fall under two broad categories. The first is high-grade corporate bonds - investment-grade corporate bonds. The second category is high-yield corporate bonds or junk bonds. The two distinctions are based among other things on the risk that the bondholder assumes by investing in those bonds. Generally speaking, investment-grade corporate bonds will yield less interest than higher-risk, junk bonds. At TRG we work with Cummins Inc employees to maximize return with minimum risk. Preferred stocks are equities that pay a fixed dividend and have a par value.
So even if shares' market value drops below par, investors will still receive the fixed dividend payment. Should that company ever redeem or call those shares, those shares are called back at par value. As a Cummins Inc employee, you need to know the different classes of equities and stocks to make sound decisions. Mortgage-backed securities are investments secured by a basket of mortgages purchased by the banks that issued them. MBS receives periodic payments similar to bond interest payments. All of the above are options Cummins Inc employees and retirees could consider for an investment strategy to generate income. A business development company is a closed-end fund that invests in organizations developing or seeking financial help. BDCs can offer high dividend yields and capital appreciation. BDCs have no par value but have loans to businesses in their portfolios that have par value. People forget about another type of fixed-income investment - Certificates of Deposit (CDs). You pay an agreed rate of interest in return for agreeing not to withdraw money from that account for a specified period of time until the maturity date.
When that CD term ends, the investor gets their principal back. Problem with CDs:
if you have an emergency and need to access those funds now, you could face early withdrawal penalties. You put money in CDs because it is insured by the Federal Deposit Insurance Corporation (FDIC). All of the amounts insured are capped, so check with your bank that the amount you put in that CD is within the limits of insurance. These are sometimes called money market deposit accounts or money market retirement savings accounts and are also considered fixed-income investments - most are backed by the FDIC - and usually carry a higher rate of interest than a traditional retirement savings account and permit account holders to make occasional penalty-free withdrawals. There are just six transactions per month - transfers or withdrawals. A contract between you and an insurance company under which you pay a lump-sum or series of payments and receive regular disbursements is called an annuity. These investments can provide a monthly income for a retiree but must be funded many years before you get any payout.
How to Invest for Income among the 11 ways to Invest for Income There's one common thread:
you can know how much income your investments will provide. Also know when you will get those interest or dividend payments. We say that by investing for income, you know with greater certainty what your financial future holds - certainty that most common stock investments cannot provide. Find out how fixed income investing or other types of investing works in our Retirement learning Library of ebooks and webinars on investing. Since increasingly many Cummins Inc employees will live 20 or 30 years in retirement, you owe it to yourself to build stable streams of income you can count on well into your final years in retirement. What if you are one of the few who make it to 100? Rather than waiting for growth in an uncertain stock market, investing for income can reduce the risk that you run out of money before you run out of life. The first is finding a financial advisor who understands planning for retirement and how to best utilize fixed-income investments.
Working with a financial advisor from The Retirement Group means working with a fiduciary who knows how to help you invest for income. A nationwide organization of financial advisors called The Retirement Group. We only plan for and design retirement portfolios for transitioning corporate employees. And each representative of The Group has been hand-picked by The Retirement Group in select cities throughout The United States. Each advisor was screened for pension expertise, financial planning experience and portfolio construction knowledge. TRG believes in teamwork to find solutions to our clients' problems. A conservative investment philosophy guides the team in constructing client portfolios with laddered bonds / CDs / mutual funds / ETFs / annuities / stocks and other investments.
They handle retirement / pensions / tax / asset allocation / estate / elder care issues. This document uses different research tools and techniques. All attempts to estimate future results involve assumptions and judgments and are therefore only tentative estimates. The law, investment climate, interest rates and personal circumstances will all change and will affect how accurate our estimations are and how appropriate our recommendations are. Such a plan requires ongoing change sensitivities as well as constant re-examination and alteration of the plan. So update your plan a few months before your expected retirement date and do an annual review.
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
Nothing contained herein shall be construed as an attempt by The Retirement Group, LLC or any of its employees to practice law or accounting. We look forward to speaking with any tax and/or legal professionals you may select regarding the implications of our recommendations. Through your retirement years, we will continue to update you on issues affecting your retirement via our complimentary and proprietary newsletters, workshops & periodic updates. Or call us at (800) 900-5867.
Sources:
1. Brandon, Emily. '7 High-Return, Low-Risk Investments for Retirees.' U.S. News & World Report , Feb. 2025, www.money.usnews.com/investing/articles/high-return-low-risk-investments-for-retirees?utm_source=chatgpt.com .
2. 'Investment Options to Generate Income in Retirement.' U.S. Bank , Feb. 2025, www.usbank.com/retirement-planning/financial-perspectives/investment-options-to-generate-retirement-income.html?utm_source=chatgpt.com .
3. 'The Benefits of a Diversified Retirement Portfolio.' TIAA , Feb. 2025, www.tiaa.org/public/learn/lifetime-income/retirement-portfolio-diversification-strategies?utm_source=chatgpt.com .
4. 'Finding Fixed Income Investments for Retirement.' Charles Schwab , Sept. 2023, www.schwab.com/learn/story/finding-fixed-income-investments-retirement?utm_source=chatgpt.com .
5.'Fixed Income for Retirement.' M1 Finance , Jan. 2025, www.m1.com/knowledge-bank/fixed-income-for-retirement/?utm_source=chatgpt.com .
How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.
Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.
What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.
Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.
In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.
Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.
How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.
Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.
What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.
Role of the Pension Benefit Guaranty Corporation (PBGC): The PBGC insures the pension benefits under the Cummins Plan, providing a safety net that enhances the reliability of these benefits. Employees covered by the plan can gain confidence in the security of their pensions, knowing that even in the face of potential plan termination, the PBGC guarantees the core benefits, subject to certain legal limits and conditions.
How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.
Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.
What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.
Procedures and Deadlines for Electing Pension Distribution: The Cummins Pension Plan outlines specific procedures and deadlines for electing a distribution upon retirement, emphasizing the importance of timely and informed decision-making. By understanding these processes, employees can avoid delays and ensure that they receive their pension benefits in the manner that best suits their post-retirement financial plans.
What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.
Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.
How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.
Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.
How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.
Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.
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