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

Healthcare Provider Update: Healthcare Provider for HP Hewlett-Packard, commonly known as HP, offers a variety of health insurance plans through large national insurers including UnitedHealthcare, Aetna, and Anthem. The choice of provider may depend on the region and specific employee benefits plan that HP provides to its workforce. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are projected to rise significantly for consumers, particularly those enrolled in Affordable Care Act (ACA) marketplace plans. With some states expecting premium hikes exceeding 60%, many consumers may find their out-of-pocket costs increasing by over 75% due to the expiration of enhanced federal premium subsidies and rising medical costs. Insurers have cited a combination of escalating healthcare expenses and the need for aggressive rate adjustments to maintain profitability as key factors behind these anticipated increases. As this scenario unfolds, it will be crucial for individuals to carefully assess their healthcare options for the coming year. Click here to learn more

“HP 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.

“HP 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 HP 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 HP 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 HP 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 HP 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 HP 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 HP 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 HP 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.

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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 HP 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 HP Inc. ensure that the pension plan benefits will remain stable and secure for employees in the future, and what measures are being implemented to mitigate financial volatility associated with these benefits? Employees of HP Inc. should be particularly aware of how the transition of their pension payments to Prudential will affect their financial security and what protections are in place to ensure that these payments are maintained without disruption.

HP Inc. ensures pension plan benefits remain stable and secure by transferring the payment obligations to Prudential, a highly-rated insurance company selected through a careful review by an Independent Fiduciary. This move is aimed at reducing financial volatility associated with HP's pension obligations while maintaining the same benefit amount for retirees. Prudential's established financial stability provides additional security to employees(HP Inc_November 1 2021_…).

What specific details can HP Inc. employees expect to learn in the Welcome Kit from Prudential, and how will these details help them understand their new payment system? HP Inc. pension participants will need to familiarize themselves with the information outlined in the Welcome Kit to make informed decisions regarding their pension benefits going forward.

The Welcome Kit from Prudential will provide HP Inc. employees with instructions to set up an online account, along with details on managing payments, tax withholdings, and other resources. This information will allow employees to familiarize themselves with Prudential’s system and ensure a seamless transition without disruptions(HP Inc_November 1 2021_…).

In what ways does the selection process for Prudential as the insurance provider reflect the commitment of HP Inc. to the well-being of its employees? Understanding the rationale behind this decision will give HP Inc. employees insights into the fiduciary responsibilities and governance processes that protect their retirement benefits.

The selection of Prudential reflects HP Inc.'s commitment to employee well-being, as it involved the Independent Fiduciary conducting an extensive review of insurance providers. Prudential was chosen based on its financial strength and ability to manage pension payments securely, showing HP's focus on protecting retirement benefits(HP Inc_November 1 2021_…).

How will the annuity payments from Prudential differ from the previous pension payments in terms of tax implications and reporting for HP Inc. employees? It is crucial for employees of HP Inc. to comprehend the tax treatment of their new annuity payments to avoid any potential pitfalls in their personal financial planning.

The annuity payments from Prudential will be taxed similarly to the previous pension payments, though employees will receive two separate 1099-R forms for 2021 (one from Fidelity and one from Prudential). For future years, only a single form will be issued. This ensures employees are aware of how to manage tax reporting(HP Inc_November 1 2021_…).

What resources are available to HP Inc. employees seeking assistance regarding their pension benefits, and how can they effectively utilize these resources to address their concerns? Knowing how to access support and guidance will empower HP Inc. employees to manage their retirement benefits proactively.

HP Inc. employees seeking assistance can access live customer support through Fidelity or contact Prudential directly after the transition. Additionally, the Welcome Kit will include important contact information for managing their benefits, making it easy for employees to address concerns(HP Inc_November 1 2021_…).

How can HP Inc. employees verify the financial health and stability of Prudential, and why is this factor important in the context of their pension benefits? Employees must ask how Prudential's financial standing influences their view of long-term pension security and what metrics or ratings they should consider.

HP Inc. employees can verify Prudential’s financial health by reviewing Prudential's annual financial reports, which are publicly available. Prudential’s strong financial ratings were a key factor in its selection, assuring employees of long-term pension security(HP Inc_November 1 2021_…).

What steps should HP Inc. employees take to update their personal information, such as banking details and tax withholding preferences, following the transition to Prudential? Understanding these processes will ensure a smooth continuation of benefits for HP Inc. employees as they adapt to the new system.

Employees do not need to re-submit their personal information to Prudential, as HP will securely transfer all necessary data, including banking and tax withholding preferences. This ensures the continuation of pension payments without the need for employee intervention(HP Inc_November 1 2021_…).

How does HP Inc. plan to address potential changes in the financial landscape that may affect pension benefits, and what role does the insurance contract with Prudential play in this context? HP Inc. employees should be informed about the company's strategic outlook and how it aims to safeguard pension assets against economic uncertainties.

HP Inc. plans to address potential financial changes through its contract with Prudential, which guarantees pension payments will remain the same. Prudential manages these risks as part of its core business, providing added security against economic volatility(HP Inc_November 1 2021_…).

In what circumstances might HP Inc. employees see changes in their net pension payments following the transition to Prudential, despite assurances that payment amounts will remain unchanged? This understanding will help employees manage their expectations regarding future payments and any adjustments they may need to make.

Employees might see changes in their net pension payments due to tax adjustments or changes in withholding instructions, but the gross payment amount will remain unchanged. Any garnishments or other deductions will continue as before, ensuring consistency in payment structure(HP Inc_November 1 2021_…).

How can HP Inc. employees contact the company directly to learn more about the pension transition process, and what channels are available for them to have their questions addressed? Clear communication lines are essential for HP Inc. employees to ensure they receive timely and relevant information regarding their pension situations.

HP Inc. employees can contact the company through the Fidelity support line or directly through Prudential for any questions about the pension transition. The Welcome Kit and other resources will provide contact details, ensuring employees have access to timely support(HP Inc_November 1 2021_…).

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

HP offers a defined benefit pension plan calculated based on years of service and final average pay. The plan provides a stable monthly income upon retirement. It does not include a cash balance component.

Layoffs and Cost-Cutting: HP Inc. plans to cut up to 10% of its workforce over the next three years as part of a cost-cutting initiative aimed at saving $1.4 billion (Source: Bloomberg). Operational Efficiency: The restructuring is intended to streamline operations and focus on growth areas like digital printing and 3D printing. Financial Performance: HP reported a 3% increase in net revenue for Q1 2024, driven by strong demand for its printing and personal systems products (Source: HP).

HP Inc. grants stock options (SOs) and RSUs to its employees as part of its equity compensation packages. Stock options allow employees to purchase company stock at a set price after a specified vesting period, while RSUs vest over a few years based on performance or tenure. In 2022, HP focused on enhancing its equity programs with performance-based RSUs to align employee incentives with company goals. This continued in 2023 and 2024, with broader RSU availability and performance-linked stock options. Executives and middle management receive significant portions of their compensation in stock options and RSUs, fostering long-term alignment with company performance. [Source: HP Annual Report 2022, p. 56; HP Q4 2023 Report, p. 23; HP Q2 2024 Report, p. 12]

HP Inc. has been proactive in updating its employee healthcare benefits to address the current economic, investment, tax, and political environment. In 2022, HP introduced its "Future Ready Transformation Plan," which included enhancements to its healthcare offerings. The company provided comprehensive healthcare plans, including medical, dental, and vision coverage, alongside mental health support and wellness programs. These benefits are designed to support employees' overall well-being, ensuring they have access to necessary healthcare resources to maintain a healthy work-life balance. This initiative reflects HP's commitment to fostering a productive and satisfied workforce, which is crucial for sustaining business success in a competitive market. In 2023, HP continued to refine its healthcare benefits as part of its ongoing efforts to support employee health and productivity. The company introduced innovations such as telemedicine services and enhanced mental health programs, which provide employees with convenient access to healthcare professionals and wellness resources. This approach aligns with HP's broader strategy to create a supportive and flexible work environment, particularly as hybrid work models become more prevalent. By investing in robust healthcare benefits, HP aims to attract and retain top talent, ensuring long-term resilience and success amid economic uncertainties.

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For more information you can reach the plan administrator for HP at 1501 page mill rd Palo Alto, CA 94304; or by calling them at 800-474-6836.

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