The world of investing is very subjective--the investment plan that’s right for you depends largely upon the level of comfort that you have when it comes to risk. We'd like our clients from Carvana to remember that you can’t completely avoid risk when it comes to investing, but it's possible for you to manage it.

There are two aspects of risk tolerance for Carvana employees to consider: (1) the capacity of your investment plan itself to absorb losses, and (2) how comfortable you are personally with risk. The first aspect can be quantified--the more flexibility your investment plan has when it comes to potential loss, the more risk your plan can tolerate. For example, as we’ve discussed, a long investment time horizon may allow you to take on more risk than a short time horizon.

The second aspect, how comfortable you are personally with risk, is more of an emotional measure, and depends on many factors, including your objectives, life stage, personality, and investment experience. Some investors are comfortable with a high degree of risk, while others can tolerate only minimal risk. Individual risk tolerance is an important factor for Carvana employees in deciding which individual investments are appropriate for them, as well as how their investment dollars should be allocated among different investment classes.

Investors are typically grouped into three categories for purposes of discussing risk tolerance: aggressive (those who have a high degree of risk tolerance); moderate (those willing to accept some degree of risk), and conservative (those who are risk averse).

That same shift from growing assets to drawing them down applies directly to the pension decisions in front of you at Carvana. Without a traditional pension, your 401(k) - alongside Social Security - forms the foundation of your retirement income at Carvana. Carvana may offer a 401(k) employer match - review your Summary Plan Description for current match rate and vesting details. Your overall withdrawal strategy, account sequence, and Roth conversion opportunities leading up to and into retirement deserve careful, personalized analysis given the income-sequencing implications.

On the healthcare side, Carvana does not offer continued medical coverage to retirees, which means coverage through the company ends when employment does. Planning for the cost of health insurance during any gap between your retirement date and Medicare eligibility at age 65 is a critical step - marketplace coverage, COBRA continuation, or a spouse's employer plan are common options. Building an accurate estimate of bridge-coverage costs into your retirement income projection prevents underestimating one of the largest variable expenses retirees face. Connecting your specific Carvana 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.