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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
“FedEx employees should view the 4% rule as a flexible planning reference rather than a guarantee, because sustainable retirement income depends on adapting withdrawals to changing markets, inflation, and personal income sources—an approach we emphasize when guiding clients.” — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
“FedEx employees often benefit most when they treat the 4% rule as a starting framework rather than a fixed outcome, focusing instead on flexibility, multiple income sources, and ongoing adjustments as retirement realities evolve.” — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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How the 4% withdrawal rule originated and what it represents.
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Why withdrawal strategies should remain flexible for FedEx retirees.
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How additional income sources and personalized planning affect long-term retirement outcomes.
Understanding the 4% Withdrawal Rule
The 4% withdrawal rule has long been considered a general guideline for retirees, including many FedEx employees planning their transition from work to retirement. This approach is designed to help support income for roughly 30 years by withdrawing 4% of a retirement portfolio in the first year and then increasing that dollar amount annually to account for inflation.
In retirement planning conversations, this guideline is often referenced, but it is important for FedEx employees to understand both what it represents and what it does not. It is a starting point for discussion, not a promise about future results.
The Origin of the 4% Rule
The roots of the 4% rule come from historical back-testing of U.S. market returns, most notably research by William Bengen and later studies commonly referred to as the Trinity Study. These analyses examined how long retirement portfolios lasted over 30-year periods when retirees followed a consistent, inflation-adjusted withdrawal approach.
The findings showed that, depending on market conditions and asset allocation, a 4% initial withdrawal often lasted through many historical periods. 1 For FedEx employees, it is important to remember that this research reflects historical market behavior and does not represent a promise about future market performance.
Retirement Planning Is Not Static
Longevity, interest rates, inflation, and market conditions all change over time. Because of this, withdrawal strategies should be viewed as planning tools rather than fixed rules that apply in every situation for every FedEx employee.
Inflation has been especially impactful in recent years. U.S. inflation reached levels not seen in nearly four decades during 2022, 2 highlighting how rising prices can place added pressure on retirees who rely heavily on portfolio withdrawals and reinforcing the importance of adjusting withdrawal strategies over time.
Another major consideration is sequence-of-returns risk. Research shows that the order in which investment returns occur, especially in the early years of retirement, can significantly influence how long a portfolio lasts. 3 For FedEx employees, weaker market returns early in retirement combined with steady withdrawals can reduce a portfolio’s ability to rebound over time.
What a Withdrawal Rate Really Means
A withdrawal rate is simply an initial estimate. For example, a 3.9% withdrawal on a $1,000,000 portfolio equals $39,000 in the first year, while a 4.0% withdrawal equals $40,000. For FedEx employees, that difference is $1,000 per year for every $1 million saved.
In practice, withdrawals are often adjusted as circumstances evolve. Inflation, market performance, health care expenses, and the presence of other income sources all influence how much a retiree ultimately spends each year.
The Role of Other Income Sources
Portfolio withdrawals are only one component of retirement income. Many FedEx employees also rely on additional sources such as:
- Social Security benefits
- Annuities
- Passive income from rental properties or other investments
Social Security, in particular, plays a key role. Benefits increase through delayed retirement credits for each year benefits are postponed beyond full retirement age, up to age 70. 4 This higher lifetime benefit later in retirement may help reduce reliance on portfolio withdrawals over time.
Flexibility Matters in Retirement
A withdrawal strategy does not need to remain unchanged forever. If markets perform well early in retirement, spending may be increased. If markets struggle, discretionary spending can be reduced temporarily. FedEx employees who maintain flexibility are often better positioned to manage uncertainty without making permanent changes.
The purpose of retirement planning is not to anticipate markets with exact precision, but to develop an approach that can adjust to changing conditions while supporting long-term income needs.
Getting Personalized Guidance
While general guidelines can be helpful, retirement outcomes depend heavily on individual factors such as age, spending needs, asset allocation, tax considerations, and income sources. For FedEx employees, reviewing how different withdrawal approaches affect long-term sustainability often requires individualized analysis.
The Retirement Group works with individuals and families to review retirement income strategies, portfolio withdrawals, and long-term planning considerations. If you would like help reviewing your personal retirement plan or withdrawal approach, you can call The Retirement Group at (800) 900-5867 to speak with a specialist who can discuss your specific situation.
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Sources:
1. Bengen, William P. “Determining Withdrawal Rates Using Historical Data.”
Journal of Financial Planning
, Financial Planning Association, Mar. 2004,
www.financialplanningassociation.org/sites/default/files/2021-04/MAR04%20Determining%20Withdrawal%20Rates%20Using%20Historical%20Data.pdf
.
2. U.S. Bureau of Labor Statistics.
Consumer Price Index — June 2022
. U.S. Department of Labor, 13 July 2022,
www.dol.gov/newsroom/economicdata/cpi_07132022.pdf
.
3. Securian Financial Group, Inc.
Sequence of Returns Risk
. Rev. Feb. 2025, Securian,
www.securian.com/content/dam/doc/ia/sound-strategies-sequence-of-returns-risk_57879-102.pdf
.
4. Social Security Administration.
Retirement Benefits
. Publication no. EN-05-10035, U.S. Government Printing Office, n.d.,
www.ssa.gov/pubs/EN-05-10035.pdf
.
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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