Navigating Retirement Challenges: What Leggett & Platt Employees Need to Know About the Upcoming Pension Freeze

Healthcare Provider Update: Healthcare Provider for Leggett & Platt: Leggett & Platt typically offers health benefits through major insurance providers, with Aetna being one of the key healthcare partners. Aetna provides a range of health and wellness solutions for its employees, ensuring access to healthcare services and support. Potential Healthcare Cost Increases in 2026: The healthcare landscape is bracing for significant premium hikes in 2026, driven by a convergence of factors including rising medical costs and the potential expiration of enhanced ACA premium subsidies. Reports indicate that ACA marketplace premiums could surge by as much as 75% for many enrollees, with certain states anticipating increases exceeding 60%. This scenario is compounded by large insurers filing for substantial rate increases, leading to not only a financial hit for consumers but also raising concerns over access to affordable healthcare coverage. As companies like Leggett & Platt navigate these impending cost escalations, both employers and employees will need to strategize and adapt to maintain care affordability amidst these challenges. Click here to learn more

Recent research released by the Alliance for Lifetime Income reveals  a concerning outlook for Baby Boomers nearing retirement, including many within Leggett & Platt. Approximately two-thirds of this demographic, set to turn 65 from 2024 to 2030, may face financial difficulties that could prevent them from maintaining their current lifestyle post-retirement. The disparities in financial readiness become starkly evident when dissecting the data by gender, ethnicity, and education.

Rob Shapiro, former undersecretary of commerce for economic affairs and author of the report, points out that of the 30.4 million Boomers entering retirement age, over 15 million will largely depend on Social Security for their income. This reliance is due to a significant number—52.5%—having assets totaling $250,000 or less, a figure that could see their resources deplete rapidly. Furthermore, an additional 14.6% hold assets under $500,000, insufficient for sustaining longer lifespans.

Addressing these concerns, Shapiro spoke at the National Press Club in Washington, D.C., highlighting that even the median retirement assets, when combined with Social Security, fail to uphold the standard of living that these Boomers are accustomed to. He emphasized the acute differences in retirement preparedness across different demographic groups, influenced by factors such as race and education, with gender also contributing.

Leggett & Platt employees might consider exploring guaranteed income annuities as a viable supplement to Social Security, a recommendation supported by the Alliance for Lifetime Income. This nonprofit coalition includes notable financial entities like American International Group Inc. and J.P. Morgan Chase & Co., advocating for enhanced retirement readiness among the 'Peak 65' group in the U.S.

Jason Fichtner, executive director of the Retirement Income Institute at the Bipartisan Policy Center, stresses the importance of incorporating annuities into retirement plans. This move compensates for the decline in traditional defined benefit pensions and supports the 'three-legged stool' of retirement: employer-sponsored pensions, personal savings, and Social Security.

Shapiro's findings underscore significant disparities in retirement savings among different groups:

1. Median savings for men are at $269,000, compared to $185,000 for women.

2. White retirees typically have $299,000, whereas Black and Hispanic retirees have much lower savings, at $123,000 and $49,000 respectively.

3. College graduates have saved about $591,000, far exceeding the $75,000 accumulated by those with only a high school diploma, and the scant $7,000 by those without any formal education.

Despite these challenges, Shapiro notes that home equity remains a substantial asset for many, which seniors prefer to retain as it keeps them connected to their communities and families.

Featured Video

Articles you may find interesting:

The gender gap in retirement savings, according to Shapiro, results from economic disparities faced by women during their working years, leading to reduced savings and less retirement security.

Panel discussions at the event also tackled the objections against annuities, such as perceived high costs and complexity. Yet, experts like William Gale from the Brookings Institution advocate for annuities as they provide a consistent income source throughout retirement.

Legislative efforts like the 2019 SECURE Act aim to improve transparency in retirement planning by requiring plans to show potential annuity income streams, enhancing participants' understanding.

With the increasing healthcare costs as a looming financial challenge for Baby Boomers nearing retirement, it's crucial for Leggett & Platt employees to plan strategically.  A 2021 Fidelity Investments analysis highlighted  that a couple retiring at 65 would need about $300,000 saved post-taxes just for medical expenses, excluding long-term care.

In summary, as many Leggett & Platt employees and other Baby Boomers approach retirement, they face a metaphorical sea of financial uncertainty. Strong financial planning, substantial retirement savings, and steady income streams are essential for navigating this challenging phase, providing confidence that they can continue to enjoy a comfortable and secure retirement life.