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

Is Renting the Right Choice for Franchise Group Employees as They Transition into Retirement?

Healthcare Provider Update: Healthcare Provider for Franchise Group The Franchise Group, a company operating several retail and service brands, typically partners with major health insurance providers to offer healthcare coverage to its employees. While the exact provider may vary, large national insurers such as UnitedHealthcare, Anthem, and Aetna are commonly chosen by companies in similar industries for their comprehensive plan offerings. Potential Healthcare Cost Increases in 2026 As we look ahead to 2026, healthcare costs are anticipated to surge significantly, primarily driven by the expiration of enhanced federal premium subsidies associated with the Affordable Care Act (ACA). Many states are bracing for substantial rate hikes, with some insurers proposing increases of over 60%. The Kaiser Family Foundation highlights that without congressional intervention, nearly 92% of marketplace enrollees could face out-of-pocket premiums climbing by as much as 75%. Combined with rising medical costs, these factors are likely to put considerable financial pressure on consumers and companies alike in the coming year. Click here to learn more

As retirement approaches, Franchise Group employees face the critical decision of whether to buy or rent a property. Downsizing from a larger family home can have significant financial and lifestyle impacts, especially if maintaining the property has become burdensome or costly.

Comparing the Costs of Buying and Renting

One of the primary benefits of selling a larger home and opting to rent is the potential for financial freedom. For instance, selling a home for $300,000 and investing the proceeds at a 6% annual return could yield $18,000 in the first year. This amount can substantially offset rental costs after taxes, reducing or eliminating the ongoing expenses of homeownership.

Renting offers flexibility in addition to financial advantages. For Franchise Group employees uncertain about their permanent residence or considering relocation within the next three to five years, renting is a practical choice. It avoids the financial risks associated with real estate market fluctuations, where temporary home appreciation might not cover upfront costs such as real estate commissions and closing fees.

Assessing Available Housing

When deciding whether to buy or rent in retirement, it's crucial to evaluate your projected lifestyle needs and financial situation. Comparing the annual rent for similar properties in your area with home prices can provide valuable insights. Utilize resources like NerdWallet.com's Rent vs. Buy calculator to make an informed decision.

Benefits and Drawbacks of Buying vs Renting

Leasing:

Flexibility to relocate
No responsibility for upkeep or repairs
Lower utility and insurance costs
No need for a substantial down payment
Risk of eviction if the property is sold

Owning:

Stability of long-term residence
Potential to build home equity
Maintenance and property tax expenses
Potential financial loss if the market declines
Capital gains tax implications on sale

Retirement Mortgages

For Franchise Group employees considering homeownership in retirement, obtaining a mortgage should not be dismissed. Given the current economic climate with variable mortgage rates and a competitive housing market, a strategic approach is advisable: consider financing part of the purchase and investing the remainder. This method keeps funds liquid for other needs like healthcare, potentially yielding higher returns from investments than home appreciation.

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Additionally, the emotional aspects of this decision are significant. Homeownership offers a sense of security and fulfillment, while renting in a retirement community can provide a stress-free living environment without the concerns of home maintenance.

Trends in the Housing Market Right Now

Rising mortgage interest rates and limited housing inventory have complicated the home-buying process. Conversely, rental markets are stabilizing as price increases return to pre-pandemic levels, offering renters more predictable costs.

In conclusion, Franchise Group employees should base their decision to buy or rent in retirement on personal preferences and sound financial judgment. The choice ultimately depends on individual financial situations, desired lifestyle, and long-term stability. Both options have distinct pros and cons. Thorough research will ensure your retirement living arrangements enhance your quality of life.

Retirees considering renting should understand the benefits of age-restricted communities. These communities often provide amenities and services tailored for seniors, such as social events, on-site medical facilities, and transportation services. A study by the American Seniors Housing Association published in January 2021 found that residents in these communities report higher satisfaction and a greater sense of community compared to those in non-age-restricted settings, significantly enhancing retirement quality of life.

Choosing between a luxurious cruise and purchasing a vacation home is analogous to deciding whether to buy or rent in retirement. Renting offers the flexibility and freedom to experience diverse locations without maintenance worries, similar to the benefits of a cruise. On the other hand, purchasing a home entails a significant initial investment and ongoing maintenance, akin to owning a vacation home, but provides stability and familiarity. The choice depends on an individual’s lifestyle preferences, financial circumstances, and desire for flexibility or permanence in their retirement years.

What retirement savings options does Franchise Group offer to its employees?

Franchise Group offers a 401(k) savings plan to help employees save for retirement.

How can employees at Franchise Group enroll in the 401(k) plan?

Employees at Franchise Group can enroll in the 401(k) plan by completing the enrollment forms provided during orientation or through the employee portal.

Does Franchise Group match employee contributions to the 401(k) plan?

Yes, Franchise Group offers a matching contribution up to a certain percentage of employee contributions to the 401(k) plan.

What is the vesting schedule for the 401(k) match at Franchise Group?

The vesting schedule for the 401(k) match at Franchise Group typically follows a graded vesting schedule over a period of time, which will be detailed in the plan documents.

Are there any fees associated with the Franchise Group 401(k) plan?

Yes, there may be administrative fees associated with the Franchise Group 401(k) plan, which will be disclosed in the plan documents.

Can employees take loans against their 401(k) balance at Franchise Group?

Yes, Franchise Group allows employees to take loans against their 401(k) balance, subject to the plan's terms and conditions.

What investment options are available in the Franchise Group 401(k) plan?

The Franchise Group 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

How often can employees change their contribution amounts to the Franchise Group 401(k) plan?

Employees at Franchise Group can change their contribution amounts to the 401(k) plan typically on a quarterly basis or as specified in the plan documents.

What is the minimum contribution percentage for the Franchise Group 401(k) plan?

The minimum contribution percentage for the Franchise Group 401(k) plan is usually set at 1% of the employee's salary, but employees are encouraged to contribute more if possible.

Can employees at Franchise Group access their 401(k) funds before retirement?

Employees at Franchise Group may access their 401(k) funds before retirement under certain circumstances, such as financial hardship or termination of employment.

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

Franchise Group, like many companies, offers retirement plans to its employees, including both pension and 401(k) plans. As of 2022, 2023, and continuing into 2024, Franchise Group aligns its retirement benefits with federal legislation, including the SECURE Act and SECURE 2.0 enhancements (RSM US) (National Law Review). For its 401(k) plan, employees are automatically enrolled at a contribution rate of 3% of their salary, which escalates annually up to 10%, per changes beginning in 2024. Employees have the option to opt out, but this automatic enrollment is designed to help employees build savings consistently. Franchise Group’s 401(k) plan also offers employer matching contributions (CLA). Part-time employees become eligible to participate after two consecutive years of at least 500 hours of service

Restructuring and Layoffs: In early 2023, Franchise Group announced a significant restructuring plan aimed at streamlining operations and improving efficiency. This move included layoffs affecting approximately 10% of the workforce across various departments. The restructuring was driven by a need to adapt to changing market conditions and enhance financial performance. Company Benefit Changes: As part of the restructuring, Franchise Group also revised its employee benefits package. Changes included reduced health insurance coverage options and modifications to retirement plan contributions. These adjustments were made to better align with the company's new strategic goals and financial outlook.

Franchise Group provides stock options as part of its employee compensation package. These options allow employees to purchase company stock at a set price within a specific timeframe. Franchise Group typically grants stock options to senior management and key employees, based on performance and tenure. Franchise Group options are generally vested over several years, with certain performance metrics required for full vesting. Franchise Group RSUs (2022-2024): Franchise Group also offers Restricted Stock Units (RSUs) to its employees. RSUs are granted to employees but are subject to vesting schedules, which are usually tied to continued employment. Franchise Group grants RSUs to a broader range of employees compared to stock options, including mid-level managers and high performers.

Traditional Group Health Insurance Plans: Franchise Group offers traditional group health insurance plans where the company pays a fixed premium to the insurance carrier. These premiums cover a range of services, including medical, dental, and vision. The insurance carrier assumes the financial risk for claims, offering protection to the company against large, unexpected medical expenses. These plans, however, can become expensive and often require high participation rates from employees (StretchDollar). Health Savings Accounts (HSAs): Employees have access to HSAs, which allow them to set aside pre-tax dollars for medical expenses. These accounts are beneficial for both employees and employers, offering flexibility and tax advantages. However, HSAs are only available to employees who have high-deductible health plans (HDHPs), which could limit participation (StretchDollar). Individual Coverage Health Reimbursement Arrangement (ICHRA): Franchise Group also offers an ICHRA, which is a newer health benefit option. This allows employers to provide pre-tax funds that employees can use to purchase their own health insurance. This option is flexible and gives employees the freedom to select a plan that fits their needs. It is particularly useful for franchises with smaller workforces or employees located in various regions (StretchDollar) (Aflac). Compliance with New Regulations: Franchise Group ensures that their health plans comply with the latest federal requirements, including those related to mental health parity and transparency in pricing. The transparency rules require the disclosure of in-network rates, out-of-network allowances, and prescription drug costs, while the mental health parity rules enforce comparative analysis for mental health and substance use disorder treatments (Aflac). Recent Developments: The company has also been updating their healthcare offerings to align with new federal mandates regarding surprise billing, transparency in coverage, and parity in mental health services. These changes are designed to enhance employee protections, streamline claims, and provide clarity in pricing, which benefits employees seeking affordable care options