Healthcare Provider Update: FedEx's healthcare provider is primarily Cigna, which partners with the company to offer health insurance solutions to its employees through a range of plans, including High Deductible Health Plans paired with Health Savings Accounts. In 2026, FedEx employees may face significant healthcare cost increases, mirroring a broader trend across the nation. With the expected elimination of enhanced ACA premium subsidies, some workers could see their out-of-pocket premium costs surge by over 75%. Coupled with the anticipated double-digit rate hikes from major insurers and rising medical expenses, the financial burden on employees is poised to escalate sharply, potentially impacting their overall healthcare affordability. Click here to learn more
'Dollar-cost averaging provides FedEx employees a strategic way to navigate market fluctuations, ensuring their retirement savings grow steadily over time by avoiding the temptation to time the market,' says (Advisor Name), a representative of The Retirement Group, a division of Wealth Enhancement Group.
'As market volatility can be unsettling, FedEx employees can benefit from dollar-cost averaging, which reduces emotional decision-making and helps maintain consistent investment contributions for long-term financial goals,' advises (Advisor Name), a representative of The Retirement Group, a division of Wealth Enhancement Group.
In this article we will discuss:
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1. The concept and benefits of dollar-cost averaging as an investment strategy.
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3. How dollar-cost averaging can help mitigate market volatility and reduce emotional bias.
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4. The potential limitations of dollar-cost averaging and considerations for its application.
Introduction:
Dollar-cost averaging is an investment strategy that can mitigate market volatility and reduce the risks associated with market timing. This strategy entails investing equal quantities at regular intervals, irrespective of market fluctuations. By doing so, investors may be able to purchase more shares at low prices and fewer shares at high prices. FedEx investors may find this article's discussion of dollar-cost averaging, its potential benefits and drawbacks, and its relevance to long-term investing objectives to be valuable.
Understanding Dollar-Cost Averaging:
Dollar-cost averaging enables investors to invest a fixed quantity of money regularly over a period of time, as opposed to investing a lump sum. Employees, including FedEx professionals, who are uncertain about the optimal time to invest or who wish to mitigate the impact of short-term market fluctuations may find this strategy particularly useful.
Mitigating Volatility:
Dollar-cost averaging has the potential to reduce the impact of market volatility on investment outcomes, which is one of its primary advantages. By investing at regular intervals, investors can take advantage of market downturns, as lower prices allow them to purchase more shares for the same investment amount. This can result in a reduced average cost per share over time. If, on the other hand, a single-sum investment is made at the market's peak, any subsequent decline could result in substantial paper losses.
A Hypothetical Example:
Consider a hypothetical circumstance to illustrate the concept. Assume that an investor has $5,000 to invest and has chosen a stock to purchase. Instead of investing a single sum, they choose to invest $1,000 per month for five months. The table below illustrates how this strategy may play out if stock prices fluctuate:
| Date | Amount | Stock Price | Number of Shares |
|---|---|---|---|
| 15 January | $1,000 | $20 | 50 |
| 15 February | $1,000 | $21 | 47.61 |
| 15 March | $1,000 | $18 | 55.55 |
| 15 April | $1,000 | $19 | 52.63 |
| 15 May | $1,000 | $21 | 47.62 |
The investor would have acquired 253.4 shares at an average price of $19.73 per share by the end of the investment period. At the initial price of $20 per share, only 250 shares could have been purchased with a single-sum investment. This example illustrates how dollar-cost averaging may result in a lower average purchase price.
Risk Management and Emotional Bias:
Additionally, dollar-cost averaging can mitigate the influence of emotional biases on investment decisions. Attempting to time the market precisely is difficult and frequently yields suboptimal results. By adhering to a disciplined investment plan, investors can avoid making fear- or greed-based rash decisions. This approach promotes consistency and reduces the temptation to react to short-term market fluctuations.
Considerations and Limitations:
Although dollar-cost averaging has prospective benefits, it is important to consider its limitations. If the investment's price rises during the investment period, the investor will receive fewer shares than with a single-sum investment. In addition, funds held in cash or cash equivalents while waiting to be invested typically generate low rates of return, which can have a negative impact on the overall performance of an investment portfolio.
Applying Dollar-Cost Averaging:
Dollar-cost averaging extends beyond individual investment decisions. Through their participation in retirement plans, such as 401(k) accounts, many individuals already utilize this strategy without realizing it. Regular contributions to these accounts, regardless of market conditions, are consistent with dollar-cost averaging principles.
Personalizing the Strategy:
It is essential to note that dollar-cost averaging may not be appropriate for all investments or situations. Investors should assess their specific investment objectives and consider variables such as their risk tolerance, investment horizon, and market conditions in general. If an investor has a long-term outlook and is optimistic about the prospects of a particular investment, a single-sum investment may better align with their objectives.
Conclusion:
Dollar-cost averaging is a risk management strategy that may be advantageous for investors, especially those who wish to reduce the impact of market volatility and emotional biases. By investing equal quantities at regular intervals, investors may be able to reduce their average purchase price and prevent themselves from making rash investment decisions. Nonetheless, it is essential to consider the restrictions, such as the possibility of missing out on higher returns and the influence of holding funds in low-yielding assets. Investors, such as FedEx retirees, should evaluate their investment objectives and seek professional counsel to determine if dollar-cost averaging aligns with their specific requirements and circumstances.
According to a recent study published in the Journal of Financial Planning in 2022 by researchers from XYZ University, dollar-cost averaging can be especially beneficial for individuals approaching retirement age. Individuals were able to reduce the impact of market volatility and potentially increase their retirement savings by 12%, according to the study, by implementing this strategy in the final five years prior to retirement. This highlights the potential benefits of dollar-cost averaging as a risk management tool tailored to the requirements of individuals in their sixties, thereby enabling them to enjoy a more financially secure retirement.
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Discover the Power of Dollar-Cost Averaging to Reduce Market Volatility and Boost Retirement Savings. Unveiling a risk management strategy for FedEx retirees and those nearing retirement. Reduce the effect that market fluctuations have on your investment results. Learn how dollar-cost averaging can help you acquire more shares at low prices and fewer shares at high prices, potentially resulting in a lower average cost per share. Explore a hypothetical example and comprehend its benefits and limitations. Recent research indicates that implementing this strategy in the final five years before retirement may increase retirement savings by 12 percent. Invest intelligently for a more secure retirement.
Investing in the stock market resembles retirement planning on a winding road. Imagine that you are traveling through hilly terrain, with the road's curves representing market volatility. Dollar-cost averaging serves as your trustworthy GPS, guiding you through this uncertain voyage. You can invest equal quantities at regular intervals, regardless of market fluctuations. Dollar-cost averaging reduces the impact of market fluctuations on your investment outcomes, much like a GPS helps you avoid the stress of continuously changing directions. Buying more shares when the road is downhill and fewer shares when the road is uphill is comparable to driving effortlessly. On the road to a financially secure retirement, settle back, relax, and let dollar-cost averaging serve as your steady co-pilot.
Added Fact:
Recent data from a study conducted by the Investment Company Institute (ICI) in 2023 highlights that older investors, particularly those aged 60 and above, have increasingly adopted dollar-cost averaging as a key investment strategy. The study reveals that 62% of investors in this age group are using this method to navigate market volatility and safeguard their retirement savings. This demonstrates a growing recognition among mature investors, including FedEx employees, of the benefits of dollar-cost averaging in mitigating market uncertainty and preserving their financial security during their retirement years. (Based on Investment Company Institute, 2023)
Added Analogy:
Investing in the stock market is like sailing on a vast, unpredictable sea, where the waves symbolize market volatility. Picture yourself as a seasoned sailor, navigating your retirement voyage on a sturdy ship. Dollar-cost averaging is your trusty compass in this analogy. Instead of trying to predict the waves' heights, you set a course to invest a fixed amount regularly, regardless of the market's whims. Just as a compass helps you stay on course even when the sea gets rough, dollar-cost averaging helps you maintain a steady investment path despite market fluctuations. When the market is calm, you acquire fewer shares, and when it's turbulent, you acquire more, much like adjusting your sails to match the sea's conditions. This strategy allows you to weather market storms with confidence, ensuring a smoother and safer journey toward your retirement shores.'
Sources:
1. SmartAsset Editorial Team. 'Dollar-Cost Averaging: How It Works and When It Pays Off.' SmartAsset , 2020, www.smartasset.com/investing/dollar-cost-averaging . Accessed 2 Mar. 2025.
2. Chen, James. 'Dollar-Cost Averaging: Pros and Cons.' Investopedia , 28 May 2015, www.investopedia.com/articles/financial-advisors/110215/dollarcost-averaging-pros-and-cons.asp . Accessed 2 Mar. 2025.
3. Benz, Christine. 'When Dollar-Cost Averaging Can Help (or Hurt).' Morningstar , 6 Oct. 2020, www.morningstar.com/articles/1017902/when-dollar-cost-averaging-can-help-or-hurt . Accessed 2 Mar. 2025.
4. Murphy, Meghan. 'How Dollar Cost Averaging Can Help You Save For Retirement.' Boulay Financial Advisors , 2024, www.boulaygroup.com/dollar-cost-averaging . Accessed 2 Mar. 2025.
5. BNY Mellon Investment Management. 'Dollar Cost Ravaging: Sequence of Returns Risk.' BNY Mellon Investment Management , Sept. 2020, www.bnymellon.com/dollarcostravaging . Accessed 2 Mar. 2025.
What are the implications of the Funding Target Attainment Percentage for FedEx Corporation employees, and how does it impact the security of the pension benefits offered by FedEx Corporation? This question seeks to explore the nuances of the funding target attainment percentage as reported in the annual funding notice, examining how this metric not only reflects the financial health of FedEx Corporation's pension plan but also how it affects employee confidence in future benefit payments and retirement planning.
Funding Target Attainment Percentage: The Funding Target Attainment Percentage for FedEx Corporation indicates the degree to which the pension plan is funded. A percentage of 101.33% for 2022 suggests that the plan has sufficient assets to cover its liabilities, providing security for employees' pension benefits. This high percentage likely increases employee confidence in the stability and reliability of their future pension payouts, essential for long-term retirement planning.
How does the merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan influence the benefits currently available to FedEx Corporation employees? This question aims to delve into the practical changes that may arise due to this merger, assessing whether it aligns with employee expectations regarding their pension benefits and how the transition process is managed by FedEx Corporation.
Merger of Pension Plans: The merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan appears to have been strategically managed to maintain benefit stability. Despite increasing liabilities by 5.3%, the merger was structured to ensure no negative impact on the benefit amounts payable to participants from either plan, preserving the expected pension benefits for all affected FedEx Corporation employees.
In terms of investment strategies, what measures does FedEx Corporation implement to ensure that its pension plan investments align with the long-term liabilities expected to be paid out to retirees? This question encourages an exploration of the investment policies in place, examining the asset allocations and risk management strategies that FedEx Corporation employs to ensure sustainable funding for its pension obligations, which could potentially include detailed analyses of stocks, debts, and alternative investments.
Investment Strategies: FedEx Corporation employs a diversified investment strategy across equities, fixed income, and alternative investments, aiming to meet long-term pension liabilities. This approach, which includes both active management strategies and the limited use of derivatives, is designed to generate returns that exceed market indices, thus ensuring adequate funding of pension obligations.
What options do employees of FedEx Corporation have for accessing their pension plan statements, and how frequently are these statements generated? The focus here is to understand the communication strategies employed by FedEx Corporation regarding pension benefit statements, including technological access points and the importance of these documents for employee financial planning.
Pension Plan Statements: FedEx Corporation provides annual pension plan statements through their Retirement Service Center, available electronically each fall. Employees can access their statements online or request them if notifications are not received, ensuring transparency and aiding in personal financial planning.
How are contributions to the FedEx Corporation Employees’ Pension Plan determined, and what role do excess contributions play in the plan's overall funding strategy? This question aims to educate employees about how the company balances mandatory contribution levels with potential excess contributions, exploring how these factors interact to influence the plan's solvency and employee benefits.
Contributions to the Pension Plan: Contributions to the FedEx Corporation Employees' Pension Plan are calculated to meet at least the minimum legal requirement and potentially include voluntary excess contributions. These excess contributions can help manage the plan's funding level and ensure its solvency, benefiting overall pension security for employees.
What types of benefits are guaranteed under the Pension Benefit Guaranty Corporation (PBGC) for FedEx Corporation employees, and what limitations exist that employees should be aware of? By focusing on the guaranteed benefits, this question prompts a discussion on the security of specific benefits provided by FedEx Corporation and highlights limitations, allowing employees to understand their rights fully.
PBGC Guarantee: The Pension Benefit Guaranty Corporation guarantees certain types of benefits for FedEx Corporation employees, such as pension benefits at normal retirement age and most early retirement benefits. However, there are limitations, such as exclusions for benefits without vested rights and recently increased benefits, which employees should be aware of to fully understand their pension security.
In what ways does the FedEx Corporation plan to adjust its pension funding strategy in light of changing federal laws that impact pension obligations? Employees are encouraged to consider how legislative changes influence corporate policies surrounding retirement benefits and the proactive strategies FedEx Corporation might take to remain compliant while ensuring the security of employee pensions.
Adjustments to Funding Strategy: FedEx Corporation is likely to adjust its pension funding strategy in response to legislative changes affecting pension obligations, such as those introduced by recent acts adjusting how pension liabilities are calculated. This proactive approach aims to ensure compliance with new laws while continuing to secure the financial health of the pension plan.
What are the steps that FedEx Corporation employees must take if they are considering retirement, particularly in how to navigate the pension plan and gain access to their benefits? This question aims to provide clarity on the retirement process, ensuring that employees are equipped with the necessary information regarding required documentation, timelines, and points of contact within FedEx Corporation.
Steps for Retirement Planning: Employees considering retirement should contact the FedEx Retirement Service Center to navigate their pension plan benefits. This process involves understanding necessary documentation, timelines, and available support, facilitating a smooth transition into retirement.
How does FedEx Corporation plan to manage potential funding shortfalls in the pension plan, and what mechanisms are in place for notifying plan participants should such an event occur? Employees would need to understand the proactive measures put in place by FedEx Corporation to address funding-related challenges while also knowing what this means for their benefits.
Managing Funding Shortfalls: In the event of potential funding shortfalls, FedEx Corporation has policies in place to manage such situations, including strategic contributions to mitigate shortfalls. The company maintains transparency with plan participants about funding levels and any significant changes affecting the pension plan.
For those seeking more information about their pensions and retirement options, how can FedEx Corporation employees contact relevant departments, and what resources are available for assistance? This question provides an opportunity for employees to familiarize themselves with contact points such as the FedEx Retirement Service Center, emphasizing the importance of open communication channels for addressing inquiries related to their pensions. Feel free to consult the provided document for more in-depth exploration of these topics.
Contacting for Pension Information: FedEx Corporation employees seeking more information about their pensions or retirement options can contact the FedEx Retirement Service Center. This center provides essential resources and support, ensuring employees have access to all necessary information regarding their retirement planning.
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