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

Investing for Income 11 Different Ways for Sears Holdings Employees and Retirees

Healthcare Provider Update: Healthcare Provider for Sears Holdings Sears Holdings typically provides healthcare benefits to its employees through various insurance plans, often with national insurers such as Aetna, UnitedHealthcare, or Anthem Blue Cross Blue Shield being among the health carriers they have partnered with. The specific providers can vary by location and employee selection during open enrollment periods. Potential Healthcare Cost Increases in 2026 As we progress into 2026, the healthcare landscape is expected to face significant challenges, particularly for employees of Sears Holdings. Forecasts indicate steep premium hikes, with some states imposing increases of over 60%, largely influenced by rising medical costs and the potential expiration of enhanced ACA premium subsidies. The Kaiser Family Foundation highlights that without congressional intervention, millions of marketplace enrollees could see their out-of-pocket costs surge by more than 75%. This convergence of factors threatens to impose a substantial financial burden on both individuals and employers, necessitating proactive strategies to mitigate rising expenses. Click here to learn more

Fixed-income investing can provide an income stream to protect capital and provide financial independence for Sears Holdings employees looking to retire comfortably, said Wesley Boudreaux, of The Retirement Group, a division of Wealth Enhancement Group.

'As more Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings employees and retirees. What if you want U.S. government bonds? As a Sears Holdings 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 Sears Holdings 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 Sears Holdings employee should work with a financial advisor who understands retirement planning and saving before you invest in such securities. As a Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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 Sears Holdings 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.

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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 the Sears Holdings Pension Plan differentiate between normal retirement, early retirement, and late retirement options for Kmart participants? In what ways do these options influence the retirement planning process for employees of Sears Holdings, and what specific considerations should Kmart employees be aware of when choosing one of these retirement paths, particularly in relation to their vested status?

Differentiation of Retirement Options: The Sears Holdings Pension Plan offers distinct options for normal, early, and late retirement. Normal retirement is available at age 65 or after five years of plan participation, whichever is later. Early retirement can be taken from age 55 but before 65, provided the employee is vested, with benefits subject to actuarial reduction unless certain conditions are met (like having at least 90 points, which is a sum of age and years of credited service). Late retirement pertains to any retirement after the normal retirement age, with pensions recalculated to reflect the delay in benefit commencement.

Considering the frozen status of the Sears Holdings Pension Plan, how does this impact the benefits eligibility for Kmart employees, and what implications does it have for their retirement savings strategies? In what ways should current employees factor in this frozen status when evaluating their overall retirement readiness and potential alternatives outside of the company plan?

Impact of Frozen Status: The freezing of the Sears Holdings Pension Plan on January 31, 1996, means that there have been no new accruals of benefits or participants since that date. For Kmart employees, this impacts their benefits eligibility by capping the pension benefits at levels earned up to the freeze date. Employees need to consider this stagnation in benefits when planning for retirement, potentially seeking additional retirement savings avenues to bridge any shortfall.

What are the essential calculations involved in determining the retirement benefits under the Sears Holdings Pension Plan for Kmart employees? Specifically, how do the Career Average Pay and Final Average Pay formulas come into play, and what factors should employees consider when estimating their future retirement payouts?

Essential Calculations for Retirement Benefits: Pension benefits for Kmart employees under the Sears Holdings Pension Plan are calculated using either the Career Average Pay or the Final Average Pay formulas. These calculations take into account an employee's years of credited service and compensation up to the freeze date. Factors like estimated Social Security benefits and specific formulas (such as a deduction based on Social Security benefits under the Final Average Pay formula) play crucial roles in determining the final pension payout.

How can Sears Holdings employees best navigate the process of applying for benefits under the Pension Plan? What specific steps should participants take to ensure their applications are processed correctly, and what important deadlines should they be aware of to avoid any negative consequences on their retirement benefits?

Navigating the Benefits Application Process: To apply for pension benefits, employees must submit a formal application, ideally 30 to 90 days before the intended commencement date. It is crucial to ensure all personal information, including marital status and spouse details, is up-to-date to avoid delays or inaccuracies in benefit processing. Missing application deadlines can lead to postponed benefit payments or unwanted default options.

In what situations can Kmart employees expect to receive a Deferred Vested Pension, and how is the calculation for this pension affected by their previous employment and vesting service? Employees should be aware of the important factors influencing their eligibility and the steps necessary to maintain their retirement benefits after leaving the company.

Eligibility and Calculation for Deferred Vested Pension: A Deferred Vested Pension is available to employees who leave the company after becoming vested but prior to qualifying for retirement. The calculation mirrors that of a normal retirement pension, with possible early commencement reductions. Understanding the timing of benefit commencement and the potential reductions for early start is vital for planning.

How does the Sears Holdings Pension Plan address tax considerations for employees receiving both monthly payments and lump sum payments upon retirement? What tax implications should Kmart participants be aware of, particularly in relation to IRS rules for distributions and potential penalties for early withdrawal?

Tax Implications of Pension Receipt: Pension payments, whether monthly or lump sum, are subject to federal taxes. Monthly benefits are taxed as ordinary income, while lump sums might be eligible for special tax treatments or rollover options to defer taxes. It’s important for Kmart employees to consider these implications and possibly consult with a tax advisor to optimize tax liability.

What are the rights and protections afforded to Kmart participants under the Employee Retirement Income Security Act (ERISA) as they navigate their retirement benefits with the Sears Holdings Pension Plan? How can employees leverage these rights to ensure they are receiving all the benefits to which they are entitled?

ERISA Rights and Protections: Under ERISA, Kmart employees are entitled to certain rights including the ability to appeal denied benefits, access to plan information, and assurances of fair and equitable treatment of their benefits. Leveraging these protections ensures that employees receive all due benefits.

What steps should Kmart employees take to update their personal information to ensure they continue receiving their benefits without interruption, especially in the context of missing participants or uncashed checks? What resources and contacts at Sears Holdings are available to assist with these updates?

Updating Personal Information: Maintaining accurate personal information with the pension plan is crucial for uninterrupted benefit payments. Employees should promptly update changes such as address, marital status, or beneficiaries to prevent issues with benefit distributions or lost checks.

How does the process of transferring between affiliated employers impact pension benefits for Kmart employees under the Sears Holdings Pension Plan? What considerations should be taken into account concerning Credited Service and Vesting Service during such transfers, and how can employees ensure they do not lose any entitled benefits?

Impact of Transfers Between Affiliated Employers: Transferring between Sears Holdings’ affiliated employers can affect pension benefits differently depending on whether the employer participates in the pension plan. It's essential to understand how such transfers impact credited and vesting service accruals.

For Kmart employees seeking more information about their benefits under the Sears Holdings Pension Plan, what is the best way to contact company representatives? How can they effectively communicate their questions or concerns to ensure they receive accurate and timely information regarding their retirement benefits?

Contacting Plan Representatives: Kmart employees seeking clarity on their pension benefits should contact the Sears Holdings Pension Service Center. Effective communication, including prepared questions and necessary documentation, will aid in obtaining accurate and comprehensive information.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Sears Holdings Corporation's pension plans were taken over by the Pension Benefit Guaranty Corporation (PBGC) following the company's bankruptcy. The two defined benefit pension plans have been frozen since 2005, meaning no new benefit accruals are added. The plans are underfunded by approximately $1.4 billion, with PBGC assuming responsibility to ensure pension payments continue. These plans cover about 90,000 participants who worked for Sears, Roebuck and Co., and Kmart Corporation. Despite the underfunding, PBGC is expected to cover the vast majority of pension benefits owed under these plans. Participants can manage their benefits and verify information through PBGC's online platform or service center.

Bankruptcy and Store Closures: Sears Holdings emerged from bankruptcy with significant store closures, reducing from nearly 700 stores to less than 25. The company has been liquidating its remaining assets and recently announced more store closures in 2024. The focus is on resolving bankruptcy-related issues and managing the liquidation process effectively (Sources: The Layoff, Yahoo Finance).

Sears Holdings offered both RSUs and stock options before its bankruptcy. RSUs vested over time, providing shares, while stock options allowed employees to buy shares at a fixed price.

Sears Holdings, now part of Transformco, has faced numerous challenges in recent years, impacting its ability to provide comprehensive employee healthcare benefits. The strategic transformations initiated since 2017 aimed to improve operational performance and liquidity, which included measures such as obtaining additional loan proceeds and real estate sales. However, the company's financial struggles and store closures have also led to significant changes in employee benefits, including healthcare. As part of its efforts to stabilize and restructure, Sears has focused on reducing outstanding debt and pension obligations, contributing almost $4 billion to its pension plan since 2005 due to prolonged low interest rates. In 2023, Transformco continued to navigate its financial challenges, which have influenced its healthcare benefits offerings. The company has aimed to maintain basic healthcare coverage for its employees despite ongoing restructuring efforts. This includes providing access to medical, dental, and vision plans, although the specifics of these benefits and any enhancements over the past years have been less prominently highlighted compared to the broader financial strategies and operational changes. The focus on financial stability and cost reduction remains critical for Transformco as it seeks to ensure the viability of its employee benefits programs amid economic uncertainties.

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Check Out Articles for Sears Holdings employees

For more information you can reach the plan administrator for Sears Holdings at 3333 beverly road Hoffman Estates, IL 60179; or by calling them at 1-800-697-3277.

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