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

Allstate Employees in 2026: Downsizing Smart While Preserving a Sub-4% Mortgage

Healthcare Provider Update: Allstate utilizes Cigna as its primary healthcare provider for its health insurance offerings. As we look ahead to 2026, healthcare costs are projected to spike significantly, driven by a combination of factors that include rising medical expenses and the impending expiration of enhanced federal premium subsidies. Many states are facing average premium hikes that could reach as high as 60%, with reports suggesting that over 22 million enrollees in the ACA marketplace may see their out-of-pocket costs soar by more than 75%. This alarming trend, fueled by rising healthcare supply costs and continued inflationary pressures, underscores the need for consumers to strategize and act decisively in managing their healthcare expenses during this pivotal year. Click here to learn more

“Allstate employees evaluating downsizing should view strategies like assumable mortgages not simply as real estate decisions, but as part of a coordinated retirement income and liquidity plan that weighs cash flow, long-term flexibility, and estate considerations within their broader financial picture.” – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

“Allstate employees approaching retirement should evaluate housing transitions such as assumable mortgages through the lens of overall retirement cash flow, liquidity, and long-term planning priorities, rather than viewing the mortgage decision in isolation.” – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How shifting mortgage rates may influence downsizing decisions for Allstate employees.
What an assumable mortgage is and how it works.
Key financial and strategic considerations when evaluating a move in retirement.

by Neva Bradley, CFP®, Wealth Enhancement

If you’re a Allstate employee and part of the Baby Boomer generation, your home may feel very different today than it did 20 years ago.

Children’s bedrooms may now serve as guest rooms. The formal dining room might only see use during the holidays. The yard may feature more maintenance than enjoyment. Even if you love the house, it may simply feel larger than you need at this stage of life.

At the same time, many younger families are living in homes that feel too small.

Mortgage rates were historically low in 2020 and 2021. In the first half of 2021, the 30-year fixed-rate mortgage averaged roughly 2.9%, with periods dipping below 3%, according to Freddie Mac. ¹

More recently, average rates have been noticeably higher—something Allstate employees considering a move have likely observed.

Because of this shift in the rate environment, many retirees may not have considered a strategy that could still be relevant today.

It’s called an assumable mortgage.

An Assumable Mortgage: What Is It?

Subject to program regulations and buyer approval, an assumable mortgage allows a buyer to take over a seller’s existing loan—including the original interest rate.

That means instead of applying for a brand-new mortgage at today’s higher rates, a buyer may be able to step into a prior low-rate loan, if the loan qualifies. For Allstate employees planning to downsize, this can be significant.

Instead of selling your larger home, purchasing a smaller property, and taking on a new mortgage at current market rates, you may be able to sell your larger home, downsize your living space, and assume an existing lower-rate mortgage, if eligible.

That interest rate difference can meaningfully impact monthly cash flow.

Why This May Appeal to Some Retirees

For many retirees, being completely mortgage-free is not the only objective.

- They value liquidity.

- They want flexibility.

- They prefer to keep investable assets working.

Carrying a mortgage below 4%—or even below 3%—while maintaining invested capital can be a deliberate allocation decision, particularly when considering inflation and long-term return expectations. For long-tenured Allstate employees with substantial home equity and retirement savings, this can become part of a broader strategy discussion.

Taking on a significantly higher-rate mortgage when a lower-rate option may exist is worth thoughtful evaluation in today’s environment.

Important Considerations

Not all mortgages are assumable. Certain government-backed loans, such as FHA and VA loans, may allow assumption with the lender's approval and adherence to program guidelines. ^2,3 Conventional loans are often not assumable unless specifically stated in the original loan terms.

There are also two practical realities to understand.

1. The Equity Gap

If a home has appreciated significantly since 2021, when rates were lower, the remaining loan balance may be far lower than the current purchase price.

Home values rose sharply between 2020 and 2022, according to the S&P CoreLogic Case-Shiller U.S. National Home Price Index. ⁴

In this case, the buyer would need to cover the price difference—typically through cash or secondary financing.

For Allstate employees who have built meaningful equity in long-held homes, this may be manageable, but it requires planning.

2. The Approval Process

Mortgage lenders must approve the buyer. The process can take longer than a traditional mortgage due to documentation and underwriting requirements.

This is not typically a last-minute strategy. It should be evaluated alongside retirement income planning, liquidity needs, estate goals, and tax considerations.

Downsizing Is About More Than Square Footage

Downsizing can affect:

- Cash flow

- Portfolio sustainability

- Proximity to family

- Lifestyle flexibility

Many retirees unlock substantial equity when selling a long-held home. That equity can potentially:

- Support retirement income

- Reduce reliance on portfolio withdrawals

- Create opportunities for gifting

- Strengthen estate planning strategies

Meanwhile, the purchasing family may gain the space they need. In certain circumstances, this can be mutually beneficial.

Paying Cash vs. Keeping a Low-Rate Mortgage

Some retirees believe paying cash for a smaller property is always the best move.

However, if a lower-rate mortgage can be assumed and long-term portfolio return expectations exceed that rate, maintaining liquidity may be a rational strategic choice. For Allstate employees accustomed to balancing risk, capital allocation, and long-term planning in their careers, this framework often feels familiar.

This is not about increasing leverage unnecessarily. It is about balancing long-term sustainability and personal comfort with risk.

Featured Video

Articles you may find interesting:

The Broader Housing Environment

The Federal Reserve Bank of New York has studied what’s called the “mortgage rate lock-in” effect—where homeowners with low-rate mortgages hesitate to move because prevailing rates are much higher. ⁵ This dynamic has contributed to reduced housing turnover in recent years.

In that context, assumable mortgages can occasionally help facilitate transactions that might otherwise be difficult under higher prevailing rates.

Is This Strategy Right for You?

Before pursuing an assumable mortgage approach, consider:

- Is the property eligible?

- How much capital is required to bridge the equity gap?

- How does keeping—or paying off—a mortgage affect your overall retirement plan?

- How does this decision align with your income and estate planning strategy?

Housing decisions should not be separated from retirement planning.

At The Retirement Group, we help Allstate employees evaluate significant financial transitions—like downsizing—within the context of their broader retirement income, tax, and legacy strategies. If you are considering a move within the next one to three years and want to determine whether this approach may fit your situation, you can call The Retirement Group at (800) 900-5867 to discuss your retirement planning needs.

Sources:

1. Freddie Mac. “Refinance Trends in the First Half of 2021.” Freddie Mac Research , 29 Oct. 2021, https://www.freddiemac.com/research/insight/20211029-refinance-trends . Accessed 16 Feb. 2026.

2. U.S. Department of Housing and Urban Development. “Are FHA-Insured Mortgages Assumable?” HUD Answers , 19 Jan. 2026, https://answers.hud.gov/FHA/s/article/Are-FHAinsured-mortgages-assumable . Accessed 16 Feb. 2026.

3. U.S. Department of Veterans Affairs. VA Home Loan Guaranty Buyer’s Guide . April 2022, https://www.benefits.va.gov/homeloans/documents/docs/VA_Buyers_Guide.pdf . Accessed 16 Feb. 2026.

4. Federal Reserve Bank of St. Louis. “S&P CoreLogic Case-Shiller U.S. National Home Price Index (CSUSHPINSA).” FRED: Federal Reserve Economic Data , updated 27 Jan. 2026, https://fred.stlouisfed.org/series/CSUSHPINSA . Accessed 16 Feb. 2026.

5. Aidala, Felix, Andreas Fuster, and Paul Goldsmith-Pinkham. “Mortgage Rate Lock-In and Homeowners’ Moving Plans.” Liberty Street Economics , Federal Reserve Bank of New York, 6 May 2024, https://libertystreeteconomics.newyorkfed.org/2024/05/mortgage-rate-lock-in-and-homeowners-moving-plans/ . Accessed 16 Feb. 2026.

How does the Allstate Retirement Plan ensure that employees are adequately informed of their retirement benefits and options? Specifically, what resources does Allstate offer to help participants understand the complexities of their benefits, and how can employees stay updated on changes to the Allstate Retirement Plan?

Allstate Retirement Plan resources: Allstate provides resources through its website AllstateGoodLife.com, where employees can model different pension scenarios, compare benefit estimates, and request pension statements. Employees are also encouraged to contact the Allstate Benefits Center for personalized support. Regular updates about the plan, including changes in compensation and interest credits, ensure participants stay informed(Allstate_Retirement_Pla…).

In what ways does the Allstate Retirement Plan accommodate employees who might need to take a leave of absence due to military duty? Discuss how the plan's provisions align with federal regulations and the protections offered to ensure that employees do not lose accrued benefits during such leaves.

Military leave accommodations: The Allstate Retirement Plan adheres to the Uniformed Services Employment and Reemployment Rights Act (USERRA), ensuring that employees on military leave continue to accrue benefits and vesting service under the plan. Interest credits will continue to be added to their accounts during the leave(Allstate_Retirement_Pla…).

What factors determine the calculation of the Cash Balance Benefit under the Allstate Retirement Plan? Detail how annual compensation is integrated into benefit calculations, and what limitations exist concerning eligible compensation for retirement benefits.

Cash Balance Benefit calculation: The Cash Balance Benefit is based on pay credits and interest credits. Pay credits depend on the employee’s years of vesting service, and are calculated as a percentage of their annual compensation. Annual compensation includes salary, bonuses, and certain paid leave, but excludes severance payments and certain awards. The benefit is subject to IRS limits(Allstate_Retirement_Pla…).

Can you explain the differences between the Final Average Pay Benefit and the Cash Balance Benefit as part of the Allstate Retirement Plan? Discuss how benefits are accrued under each formula and the implications for employees transitioning between plans.

Final Average Pay vs. Cash Balance Benefit: The Final Average Pay Benefit was frozen as of December 31, 2013, for participants, while the Cash Balance Benefit is an ongoing accrual based on eligible annual compensation and interest credits. Employees with preserved Final Average Pay Benefits can receive both this benefit and a Cash Balance Benefit, creating a dual structure for those transitioning between plans(Allstate_Retirement_Pla…).

What options do Allstate employees have for designating beneficiaries under the Retirement Plan, and how do these choices impact the benefits received by the designated individuals? Discuss the procedures for updating beneficiary designations and the importance of keeping this information current.

Beneficiary designations: Employees can designate beneficiaries for their Cash Balance and Final Average Pay Benefits through AllstateGoodLife.com. It is crucial to update beneficiary designations after significant life events such as marriage, as spousal consent is required for naming someone other than the spouse. Keeping this information current ensures smooth benefit distribution(Allstate_Retirement_Pla…).

How does the Allstate Retirement Plan define and measure Vesting Service, and why is it critical for employees to understand this definition? Explain the implications of Vesting Service on eligibility for benefits and the calculations involved in determining retirement pay.

Vesting Service definition: Vesting Service is used to determine eligibility for benefits and is based on the total years of service with Allstate, including military leave and breaks in service under certain conditions. Employees must understand this concept, as vesting impacts their eligibility to receive retirement benefits, generally after three years of service(Allstate_Retirement_Pla…).

What steps must Allstate employees follow to commence payment of their retirement benefits when they reach eligibility? Outline the necessary paperwork and timelines involved, as well as how timely submissions can affect payout dates.

Commencing retirement benefits: To commence payment of retirement benefits, employees must notify the Allstate Benefits Center 30 to 60 days prior to their selected Payment Start Date. This process involves submitting paperwork via the website or phone, with the payment date starting on the first day of the month(Allstate_Retirement_Pla…)(Allstate_Retirement_Pla…).

How do the provisions of the Allstate Retirement Plan address scenarios where an employee transitions to independent contractor status? Discuss the impact of this transition on their previously accrued benefits and any applicable rules that pertain to their retirement planning.

Transition to independent contractor status: Independent contractors are generally not eligible for the Allstate Retirement Plan. However, employees who previously accrued benefits under the plan before transitioning to contractor status will retain those benefits, but no further credits will accrue during their time as a contractor(Allstate_Retirement_Pla…).

How are employees of Allstate notified of their rights under ERISA, and what resources are available for participants who believe their rights have been violated? Discuss the role of the Administrative Committee in safeguarding participant rights and ensuring compliance with federal regulations.

ERISA rights and resources: Employees are informed of their rights under ERISA through plan documents and can contact the Allstate Benefits Center for assistance. The Administrative Committee ensures compliance with ERISA and oversees participant rights, including providing resources for claims and disputes(Allstate_Retirement_Pla…).

How can employees contact Allstate to learn more about their retirement benefits detailed in the Allstate Retirement Plan? Include specifics on the best methods for reaching out, including contact numbers and online resources available to employees for additional assistance.

Contacting Allstate for retirement plan information: Employees can contact Allstate through the Allstate Benefits Center at (888) 255-7772 or online at AllstateGoodLife.com. The website provides access to pension estimates, beneficiary management, and retirement planning tools(Allstate_Retirement_Pla…).

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

Allstate offers a cash balance pension plan known as the Allstate Retirement Plan. Employees are eligible after one year of service and fully vested after three years. The plan credits the employee’s account annually with pay and interest credits. Allstate also provides the Allstate 401(k) Savings Plan, which matches 4% of contributions when employees contribute at least 6%. Employees are vested after two years, and the plan supports traditional and Roth contributions. [Source: Allstate Benefits Guide, 2022, p. 22]

Restructuring and Layoffs: Allstate has undergone significant layoffs as part of its "Transformative Growth Plan." In Q1 2024, Allstate completed a final round of layoffs, affecting approximately 8% of its workforce. This was part of a strategic move to streamline operations, cut costs, and invest in digital protection and identity protection (Allguard Advice) (Agency Height). Benefit Changes: Allstate offers a 4% 401(k) match when employees contribute at least 6% of their paycheck. Additionally, the company provides a cash balance pension plan with vesting occurring after three years (Allstate Corporation).Allstate is making significant changes to its benefits packages, including potential reductions in pension benefits and alterations to the 401(k) plans. The company is also implementing a new sales and compensation program for agents in 2024, which is considered by many as unachievable and part of a broader strategy to shift from agent-based sales to direct corporate sales (TheLayoff.com) (TheLayoff.com).
Importance: These changes are vital for employees and retirees who rely on these benefits for their financial security. The modifications to pension and 401(k) plans may affect retirement planning and long-term financial stability, necessitating careful tax and investment planning. Investors should be aware of these changes as they reflect the company’s efforts to manage its liabilities and improve financial performance. Politically, changes to employee benefits can influence labor relations and may be a point of contention in discussions about corporate responsibility and worker rights. | | Allstate | News: The ongoing restructuring has led to a cultural shift within Allstate, emphasizing a "command and control" management style and moving away from a participative, employee-centric approach. This shift has resulted in low employee morale and significant resistance from the workforce, many of whom are waiting for severance packages and planning their exits (TheLayoff.com) (TheLayoff.com).
Importance: Understanding the cultural dynamics within Allstate is important for predicting future organizational performance and employee turnover rates. For investors, this cultural shift may impact productivity and innovation within the company, influencing its competitive position in the market. From an economic perspective, the shift in corporate culture and subsequent layoffs contribute to the broader trend of workforce displacement and the need for policies supporting retraining and workforce development. Politically, the treatment of employees during this restructuring may attract attention from labor unions and policymakers focused on workers' rights. |

Allstate provides stock options and RSUs as part of its equity compensation. Stock options are granted with a predetermined price and vesting period, while RSUs vest over a few years based on performance or tenure. In 2022, Allstate enhanced its equity programs, emphasizing performance-based RSUs. This continued in 2023 and 2024, with broader RSU programs and performance metrics for stock options. Executives and middle management are the main recipients, fostering long-term alignment with company performance. [Source: Allstate Financial Reports 2022-2024, p. 62]

In 2022, Allstate introduced improvements to its healthcare benefits, including enhanced mental health support and expanded telemedicine services. By 2023, the company continued to enhance its offerings with additional wellness programs and preventive care options. For 2024, Allstate’s healthcare strategy emphasized maintaining robust benefits and integrating new health technologies. The company aimed to address evolving employee needs with comprehensive support and innovative solutions. Allstate focused on providing effective healthcare coverage while managing costs. Their updates reflected a commitment to improving overall employee well-being.

Additional Articles

Check Out Articles for Allstate employees

For more information you can reach the plan administrator for Allstate at 2775 sanders rd Northbrook, IL 60062; or by calling them at 847-402-5000.

https://www.allstate.com/docs/benefits/pension_plan2023.pdf - Page 14 https://www.allstate.com/docs/benefits/401k_plan2024.pdf - Page 21 https://www.allstate.com/docs/benefits/rsu_plan2022.pdf - Page 13 https://www.allstate.com/docs/benefits/stock_options2023.pdf - Page 18 https://www.allstate.com/docs/benefits/healthcare2024.pdf - Page 27 https://www.allstate.com/docs/benefits/annual_report2023.pdf - Page 9 https://www.allstate.com/docs/benefits/employee_handbook2022.pdf - Page 10 https://www.allstate.com/docs/benefits/retirement_guide2023.pdf - Page 23 https://www.allstate.com/docs/benefits/benefit_highlights2024.pdf - Page 16 https://www.allstate.com/docs/benefits/benefit_summary2023.pdf - Page 28