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Steering Clear of Retirement Pitfalls: Strategies for Nationwide Employees

'Nationwide 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.

'Nationwide 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 Nationwide 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. Nationwide 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 Nationwide, 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. Nationwide 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 unique benefits provided by the Nationwide Retirement Plan that differentiate it from other retirement plans? How does Nationwide Mutual Insurance Company ensure the plan meets the regulatory requirements while still addressing the needs of its employees?

Unique Benefits of Nationwide Retirement Plan: Nationwide’s Retirement Plan provides both a Final Average Pay (FAP) Benefit and an Account Balance Benefit, which allows flexibility for employees hired at different times. The plan is qualified under Section 401(a) of the Internal Revenue Code, ensuring compliance with federal tax laws. Nationwide ensures regulatory compliance while addressing employee needs through ongoing contributions, actuarial evaluations, and options like lifetime income for retirees and survivors.

How can employee participation in the Nationwide Retirement Plan impact their overall retirement savings strategy? What role does the defined benefit pension plan play in conjunction with Social Security and personal savings for employees of Nationwide Mutual Insurance Company?

Employee Participation Impact: Participation in the Nationwide Retirement Plan enhances employees' overall retirement savings strategy by integrating Social Security, personal savings, and the defined benefit plan. The FAP benefit, based on final average compensation, works alongside Social Security to offer a stable income, while the Account Balance Benefit adds flexibility in retirement income options.

What options do employees of Nationwide Mutual Insurance Company have when they retire before the age of 55, and how do these options compare to those available for employees who retire after reaching that age? What factors influence the choices employees make regarding timing and type of benefit commencement?

Retirement Options Before and After Age 55: Employees retiring before age 55 can start receiving their benefits immediately, but they face early retirement reductions. Those retiring after age 55 may choose from more benefit options like annuities and receive higher, less-reduced payments. The choice to retire before or after age 55 depends on factors like financial need and health, and affects the timing and size of the benefit commencement(Nationwide Mutual Insur…).

In what ways does the structure of the benefit formulasâ€”Final Average Pay (FAP) Benefit and Account Balance Benefitâ€”affect the retirement income of employees at Nationwide Mutual Insurance Company? What are the implications for employees considering different retirement timings?

Effect of Benefit Formulas on Income: The FAP Benefit is based on Final Average Pay and Social Security coordination, offering a larger benefit for those with higher incomes, while the Account Balance Benefit is based on accumulated contributions and interest. The timing of retirement plays a crucial role in determining income, as early retirement results in reduced benefits, while late retirement allows for continued service accrual and potentially higher payouts.

How does the Nationwide Mutual Insurance Company address spousal benefits under the retirement plan, particularly regarding the Qualified Preretirement Survivor Annuity (QPSA)? What are the actions that employees need to take to ensure their spouses receive these benefits?

Spousal Benefits and QPSA: Nationwide offers a Qualified Preretirement Survivor Annuity (QPSA) to ensure that a spouse receives benefits if the participant dies before retirement. Employees must name their spouse as a beneficiary or obtain notarized consent if they wish to designate someone else. To ensure the spouse receives the QPSA, employees must take the appropriate legal steps outlined in the plan.

What steps must employees of Nationwide Mutual Insurance Company take to successfully file a claim for retirement benefits, and what is the timeframe for processing these claims? How does the company ensure that employees understand their rights under the Employee Retirement Income Security Act (ERISA)?

Steps to File a Claim for Retirement Benefits: To file a claim, employees must notify the Nationwide Retirement Center at Fidelity and submit the required paperwork. Claims are typically processed within 60 days, and Nationwide ensures that employees understand their rights under ERISA through detailed communications and support from Fidelity Investments.

What are the situations that might cause delays or loss of benefits for employees retiring from Nationwide Mutual Insurance Company? How can employees proactively manage these risks to ensure they receive their entitled benefits?

Situations Leading to Delays or Loss of Benefits: Delays can occur if employees fail to submit necessary paperwork, keep their contact information updated, or if they are not vested at the time of severance. Employees should proactively manage these risks by completing forms timely and maintaining communication with the Plan Administrator to avoid disruptions in benefits.

Can employees at Nationwide Mutual Insurance Company alter their distribution choices after commencing their retirement benefits? What regulatory frameworks influence their ability to change benefit elections, and under what circumstances might these changes be permitted?

Changing Distribution Choices After Retirement: Once retirement benefits commence, changes to distribution elections are limited. For example, lump-sum payments and annuity selections are typically irrevocable after commencement, and spousal consent is required for certain changes. Federal regulations, such as IRS rules, further restrict post-retirement changes in benefit elections(Nationwide Mutual Insur…).

How does the Nationwide Mutual Insurance Company plan for automatic post-retirement benefit increases, and what factors determine the percentage increase? How do these increases impact the long-term financial security of retirees?

Post-Retirement Benefit Increases: Nationwide offers automatic post-retirement benefit increases for participants with service before 1996, with annual increases between 0% and 3% based on fund performance. These increases help to protect retirees’ long-term financial security by adjusting their pension income for inflation.

How can employees contact NDPERS for more information regarding their retirement options, and what specific resources are available for personalized assistance? Clear communication channels and support services are essential for helping employees navigate their retirement planning effectively with NDPERS.

Contacting the Nationwide Retirement Center: Employees can reach the Nationwide Retirement Center at Fidelity by calling 1-800-238-4015 for inquiries about their retirement plan. Fidelity provides detailed support, including benefit estimates, plan information, and assistance with filing claims and selecting benefit distribution options(Nationwide Mutual Insur…).