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Steering Clear of Retirement Pitfalls: Strategies for CUNA Mutual Group Employees

'CUNA Mutual Group employees nearing retirement should consider the 'bucket strategy' as a proactive way to help protect their retirement income from sequence of returns risk, providing a stable cash flow during market downturns while allowing their long-term investments to recover—creating a robust plan for both stability and growth.' – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'CUNA Mutual Group employees approaching retirement can benefit from diversifying their income strategy using the 'bucket strategy,' which provides for short-term needs while positioning assets for long-term growth, establishing a balanced approach to market volatility and inflation.' – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The risks of sequence of returns and how it can impact your retirement income.
The 'bucket strategy' for managing market volatility in retirement.
How to plan for inflation to help maintain your purchasing power during retirement.

Many CUNA Mutual Group employees nearing retirement have worked hard to save, invest, and prepare for a stable financial future. However, even the most carefully crafted retirement plans can face a hidden risk that’s often overlooked: sequence of returns risk. This risk occurs when the timing of market returns negatively impacts a retiree's ability to generate income from their portfolio.

Sequence of Returns Risk: What is it?

For anyone depending on their investments for retirement income, risk is an inevitable part of the equation. Sequence of returns risk highlights a problem that can arise even with a solid financial strategy: even if you diligently save, make smart investments, and plan your retirement, a market downturn early in retirement can hinder the recovery of your portfolio. This can lead to reduced future income, especially if you’re forced to sell investments at a loss to cover expenses.

The key factor behind this risk is that, while markets generally trend upward over time, the returns you experience early in retirement significantly influence your long-term financial health. If the market underperforms during those first few years, especially if you’re making withdrawals, your portfolio's future potential can be seriously affected.

The Significance of Timing

Many investors assume that, over time, markets will rise, and they fail to account for the immediate impact market downturns can have on retirees. When you begin withdrawing income from your retirement portfolio and the market drops, you may be forced to sell assets at a loss. This not only locks in the losses but also reduces the ability of the remaining portfolio to grow, limiting future income potential.

This issue is not just a theoretical one; real-life examples abound where retirees have struggled to meet their financial goals due to poor timing early in retirement. Negative returns early on can disrupt even well-constructed portfolios. The sustainability of early retirement income and future growth potential can be compromised by such setbacks.

The “Bucket” Strategy: A Smarter Way to Generate Income

To manage sequence of returns risk, it’s essential to design a retirement income strategy that accounts not just for how much you’ve saved, but also when you access those funds. CUNA Mutual Group employees should consider a strategy that divides retirement assets into multiple “buckets,” each with its own function and time horizon. This approach is designed to provide a reliable income stream, regardless of market fluctuations.

Here’s how the strategy works:

Bucket 1: Stability First, Years 1–5

The goal of Bucket 1 is to provide the income you need during the early years of retirement. This bucket includes low-risk, highly liquid assets like cash reserves, certificates of deposit (CDs), short-term treasuries, or fixed annuities. The focus here is on stability, making sure that you have the cash required during this crucial period without worrying unduly about market swings.

Bucket 2: Moderate Growth with Purpose, Years 6–10

While Bucket 1 focuses on stability, Bucket 2 emphasizes moderate growth. It may include bonds, fixed annuities with income riders, and other conservative investments with a longer maturity. The strategy here is to grow these assets in a way that aligns with future income needs, offering moderate risk while preparing for the years ahead.

Bucket 3: Long-Term Growth and Volatility Management, Years 11–15

Bucket 3 is designed for long-term growth and is meant for later years of retirement. With the first two buckets covering the early years, Bucket 3 can afford to take on more volatility by investing in stocks, which, while more volatile in the short term, offer greater potential for growth. This bucket is intended to withstand market downturns and notionally has the time to recover and take advantage of long-term market trends.

Bucket 4 and Beyond: Legacy and Longevity, Years 16+

For those planning a retirement longer than 15 years, Bucket 4 focuses on long-term growth. This bucket may consist of riskier investments, designed to grow over time and support legacy goals, long-term care needs, or late-stage retirement expenses. Funds in this bucket are meant to meet financial needs that arise far down the road, whether it’s covering health care costs or providing a legacy for future generations.

The Bucket Strategy’s Benefits

This strategy works because it helps retirees reduce emotional decision-making during volatile market periods. With portions of assets already set aside for short-term income, you can rest easy knowing that even in times of market volatility, your immediate needs are covered. This optimally allows your long-term growth assets to recover, potentially eliminating the need to sell investments in a downturn.

The strategy offers not only growth potential for the later years of retirement but also frees retirees from over-relying on the market for their daily living expenses, offering peace of mind.

In Conclusion

Retirement planning isn’t just about saving enough money—it’s about making sure that savings last through your retirement years. If you are approaching retirement at CUNA Mutual Group, now is the ideal time to explore creating a structured income plan with a fiduciary advisor. This approach can increase confidence around your financial future, potentially helping you sidestep the pitfalls of sequence of returns risk.

The strategy outlined here aims to provide comfort, reduce the stress of market swings, and help your portfolio withstand both prosperous and difficult years. CUNA Mutual Group employees have the opportunity to work with trusted professionals to create well-thought-out retirement plans that support their financial futures while providing a reliable income throughout retirement.

One of the most common mistakes retirees make immediately after retirement is underestimating the importance of adjusting their withdrawal strategy for inflation. A 2023 study by Fidelity Investments shows that retirees who neglect inflation may experience a decline in purchasing power as they age. It’s essential to include inflation-adjusted solutions in your retirement plan to preserve your purchasing power, even with small inflationary increases over time. By planning for this, you can better maintain your quality of life despite rising costs.

Explore how a structured income plan can help manage your retirement funds from the sequence of returns risk. Examine the 'bucket strategy' for managing retirement income, which balances stability, growth, and long-term objectives. Create a plan that shields against market downturns and provides consistent income, supporting your financial future. Learn essential techniques for managing risk and increasing returns in retirement. Optimize your retirement income with careful planning and low-risk investments. Use professional retirement strategies for long-term confidence.

Retirement is like preparing for a long road trip. You've packed your bags, checked your vehicle, and mapped out your route. But one of the biggest mistakes retirees make is neglecting to adjust their spending plans for the rising costs they will face over time. Ignoring inflation can gradually reduce your purchasing power, much like running out of fuel during a trip can derail your plans. By planning for inflation, you can avoid the financial bumps along the way.

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Sources:

2. 'Why Keeping Growth in Your Portfolio After 70 Is Crucial for Your Financial Health.' Investopedia , 2 June 2025.

2. 'Why Keeping Growth in Your Portfolio After 70 Is Crucial for Your Financial Health.' Investopedia , 2 June 2025.
- 3. Sloan, Jim. 'I'm a Wealth Manager: This Is How to Reduce One of the Biggest Risks to Your Retirement.' Kiplinger , 1 June 2025.
  - 4. 'Inflation Is Weighing Heavily on Retirees.' Investopedia , 3 June 2025.
    - 5. 'What Millennials Should Do to Combat the Fear of Running Out of Money.' Investopedia , 2 June 2025.

What are the key differences between defined benefit plans and defined contribution plans offered by CUNA Mutual Group, and how might these differences affect my retirement benefits? As an employee of CUNA Mutual Group, understanding the nuances of defined benefit plans versus defined contribution plans is critical for effective retirement planning. Defined benefit plans typically promise a specific payout at retirement based on factors such as salary history and duration of employment. In contrast, defined contribution plans, like 401(k) plans, depend more on employee contributions and investment performance. Given the volatility in investment returns and changing employment patterns, employees might find themselves at a crossroad between predictable retirement income versus self-directed savings and investment risks. It's vital to explore how these plans could impact long-term financial security at retirement.

A defined benefit plan at CUNA Mutual Group offers predictable retirement payouts, typically based on salary history and years of service, ensuring employees a guaranteed income in retirement. In contrast, defined contribution plans, such as a 401(k), rely heavily on individual contributions and investment performance. Employees may face risks with defined contribution plans due to market volatility but benefit from greater control over their retirement savings. Depending on your financial situation and retirement goals, these differences can impact how secure your future income will be, either through guaranteed payouts or potential growth in investments.

How are pension costs determined in a defined benefit plan at CUNA Mutual Group, and what factors can influence these costs over time? The cost structure of a defined benefit plan at CUNA Mutual Group is predicated on various components, including service costs, interest costs, expected returns on assets, and amortization of gains and losses. Understanding these factors helps in managing potential burden changes on the organization's budget and employees' retirement expectations. For instance, factors such as fluctuating interest rates can significantly alter the present value of future liabilities, affecting the costs that CUNA Mutual Group bears. Employees should be versed in these aspects to contextualize their retirement benefits.

Pension costs at CUNA Mutual Group are influenced by factors such as service cost (new benefit accruals), interest cost (growth on past benefits), expected return on plan assets, and the amortization of gains or losses. Changes in these factors, like fluctuations in interest rates or salary adjustments, can affect the overall cost of the plan. Employees should be aware of how these variables impact their future pension benefits and how changes to the company's funding strategy could alter expectations.

What strategies can CUNA Mutual Group adopt to manage the costs and benefits of its defined benefit plan without drastically impacting employees' retirement security? CUNA Mutual Group faces the challenge of balancing cost management for its defined benefit plan while also ensuring that employees have adequate retirement benefits. Options like freezing benefit accruals, amending contribution formulas, or shifting to defined contribution plans can be explored. However, such strategies must be handled delicately to avoid significant disruptions to employees' retirement planning. Understanding employee concerns and the potential ramifications of these strategies is crucial to formulating a balanced approach.

CUNA Mutual Group can adopt strategies such as freezing benefit accruals, transitioning to cash balance designs, or reducing benefit formulas to manage costs. These strategies may lower expenses but must be carefully balanced to avoid significantly affecting employees' long-term retirement benefits. Clear communication about potential changes and their impact on retirement income is crucial for employees to adjust their retirement planning.

In what ways could regulatory changes influence the CUNA Mutual Group's pension plan design and its offerings to employees after retirement? Regulatory bodies frequently revise guidelines that govern employee benefit plans, potentially impacting how CUNA Mutual Group structures its pension offerings. For instance, changes to tax policies or pension funding requirements could affect administrative decisions regarding contribution levels or payout structures for defined benefit plans. It is imperative for employees to stay apprised of these regulations so they can understand any changes that might occur in their future benefits and what steps CUNA Mutual Group might take to adapt to new compliance needs.

Regulatory changes, such as adjustments in pension funding requirements or tax policies, can have a substantial impact on CUNA Mutual Group’s pension plan design. Changes in laws may require adjustments to benefit levels, contribution structures, or funding strategies. Employees should monitor such regulatory shifts to understand how they could influence future pension payouts and retirement strategies.

Could you explain the process employees at CUNA Mutual Group would need to undertake to access their retirement benefits upon leaving the company? For employees transitioning from CUNA Mutual Group to other ventures, itâ€™s essential to understand the process involved in accessing retirement benefits. This process may involve determining eligibility for pension payouts, selecting between lump-sum distributions or annuitized payments, and understanding how past contribution levels affect final benefits. Employees are encouraged to seek guidance from the HR department or pension plan administrators to navigate this process thoroughly.

When leaving CUNA Mutual Group, employees need to assess their eligibility for pension benefits, choose between lump-sum payouts or annuities, and understand how their years of service and contributions affect the final payout. It's advisable to consult with HR or a plan administrator to navigate the options and ensure that the benefits are accessed appropriately.

What tools and resources does CUNA Mutual Group provide to assist employees in planning for retirement effectively? CUNA Mutual Group offers various resources designed to support employees in their retirement planning journey. These might include access to financial planning tools, informational webinars about defined benefit and contribution options, or one-on-one consultations with benefits specialists. Employees should actively participate in these offerings as a means of optimizing their retirement readiness and ensuring they are leveraging all available benefits to the fullest extent.

CUNA Mutual Group offers several resources for retirement planning, such as access to financial planning tools, retirement webinars, and consultations with benefits specialists. These resources are designed to help employees make informed decisions about their defined benefit and defined contribution options, ensuring they optimize their retirement strategies.

How does the CUNA Mutual Group approach the issue of pension funding, and what implications does this have for current and future employees? The funding strategy for the pension plan at CUNA Mutual Group has significant implications for the benefits that employees can expect. A well-funded pension plan can provide assurance for employees about the stability and security of their retirement income. Conversely, fluctuations in the funding status could lead the organization to consider changes in benefit formulas or contribution strategies. Employees should be aware of how funding levels could affect their future benefits and the overall health of the pension plan.

CUNA Mutual Group’s pension funding strategy is critical to maintaining the stability of retirement benefits. A well-funded plan assures employees of predictable payouts, while underfunded plans may lead to changes in benefit formulas or contributions. Employees should stay informed about the funding status, as it could affect the future security of their pension income.

What should employees at CUNA Mutual Group know about the potential risks and benefits associated with their defined benefit plan? Employees should have a clear understanding of the inherent risks and benefits linked to CUNA Mutual Group's defined benefit plan. While these plans offer predictable retirement income, they are subject to various risks such as underfunding issues, market volatility, and regulatory changes. This understanding equips employees with knowledge about their eventual retirement income and helps them plan strategically alongside their professional developments or transitions within their careers.

Employees need to understand that defined benefit plans at CUNA Mutual Group provide predictable retirement income but come with risks such as underfunding, economic fluctuations, and regulatory changes. By staying informed about these risks, employees can better plan for their financial security in retirement, potentially supplementing their pension with other savings strategies.

What happens to my retirement benefits if CUNA Mutual Group decides to freeze its defined benefit plan? The implications of freezing a defined benefit plan at CUNA Mutual Group would be substantial for employees. Understanding the details surrounding such a freeze, including whether it would impact future accruals or merely limit new benefits for incoming participants, is crucial. Employees should consider consulting HR for comprehensive information regarding their specific situations and how a freeze could influence their expected retirement payouts.

If CUNA Mutual Group freezes its defined benefit plan, employees may no longer accrue new benefits, though they retain previously earned benefits. A freeze could impact future retirement income, particularly for employees nearing retirement, as they could miss out on years of service accruals or salary increases factored into their final benefit calculation.

How can employees contact CUNA Mutual Group to inquire further about their retirement benefits and related services? To learn more about retirement benefits, employees should reach out directly to CUNA Mutual Groupâ€™s HR department or designated pension plan administrators. The organization provides channels such as in-person meetings, phone consultations, and online resources which are specifically structured to assist employees with inquiries related to their retirement benefits and participant obligations. Employees can also explore dedicated web portals for additional information and updates on their pension plans.

Employees can contact CUNA Mutual Group directly through their retirement solutions division at 1-800-356-2644 or visit the website at CUNA Mutual Retirement Solutions for more information about retirement planning services and personalized assistance with their retirement benefits.

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For more information you can reach the plan administrator for CUNA Mutual Group at 5910 Mineral Point Rd Madison, WI 53705; or by calling them at (608) 238-5851.