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Understanding the Inflation Challenge for Jones Lang LaSalle Retirees: What You Need to Know

Healthcare Provider Update: Healthcare Provider Information for Jones Lang LaSalle Jones Lang LaSalle (JLL) offers a comprehensive range of healthcare real estate services. The company specializes in managing, optimizing, and developing healthcare facilities, leveraging its deep expertise to support healthcare providers in enhancing operational efficiency and improving patient care environments. Through its Healthcare Center of Excellence, JLL provides clients with tailored real estate solutions to navigate the complexities of the healthcare landscape effectively. Potential Healthcare Cost Increases in 2026 As we head into 2026, healthcare costs are projected to see significant increases due to a perfect storm of factors. Record hikes in health insurance premiums for ACA marketplace plans, sometimes exceeding 60% in various states, combined with the likely expiration of enhanced federal subsidies, could result in over 75% more out-of-pocket premiums for the majority of enrollees. Coupled with persistent medical cost inflation driven by high hospital and drug prices, consumers may find healthcare increasingly unaffordable unless proactive steps are taken now. The evolving regulatory environment will further complicate the landscape, emphasizing the necessity for strategic decisions in coverage and care. Click here to learn more

Since 2021, the persistent effect of inflation on retirees' financial security has grown more noticeable, emphasizing the vulnerabilities of people who have left the workforce. Recently published research from Boston College highlights the ongoing difficulties caused by price increases, especially for those who depend on fixed incomes and savings in retirement.

The Impact of Inflation on Retirement Savings

Based on research performed by senior research economist Laura Quinby of Boston College's Center for Retirement Research, retirees have been forced to take out larger amounts of their savings than they had planned because of the ongoing high rates of inflation. By drastically reducing their savings, or 'nest eggs,' this behavior runs the risk of endangering their long-term financial stability. Jones Lang LaSalle employees must be particularly vigilant about their withdrawal rates and savings depletion to assist in a shielded retirement.

Although there has been a slight decline from the 9.1% annual rate that was reported in June 2022, inflation rates have remained persistently high. According to Labor Department data, as of April, the annual rate of inflation was 3.4%, which was more than the Federal Reserve's 2% objective. The prolonged rise in prices is gradually diminishing the purchasing power of retirees, especially those whose retirement plans mostly comprise fixed-income and cash investments.

Predicted Decline in Financial Wealth

The study's worrisome predictions suggest that by 2025, middle-class retirees' financial wealth may have decreased by 14.2% due to inflation. This situation might get worse, with the decline reaching 16.6% in the event of a possible recession brought on by rising interest rates. Additionally, the study found that almost 25% of retirees changed the rate at which they were withdrawing money between 2021 and 2023, which resulted in an average yearly increase in payouts of $1,810.

The effects of inflation are not felt by retirees in the same way. It is anticipated that by 2025, the financial wealth of those in the lower third of the wealth distribution—who usually keep larger percentages of their retirement savings in cash and bonds—will have decreased by as much as 18.8%. In contrast, the wealthiest retirees are expected to be less affected, with an average wealth drop of only 4.3%. This is because they are more likely to hold diversified investments, including equities. Jones Lang LaSalle employees should consider diversifying their portfolios to mitigate the impact of inflation.

Inflation's Broader Economic Impact

The study draws attention to a broader economic trend impacting near-retirees, particularly those between the ages of 55 and 61 who continue to work full-time. Due to inflation, 39% of this group said they saved less between 2021 and 2023, while over a quarter said they boosted their spending from savings. By 2025, it is predicted that this group's financial wealth will have decreased by 21.7%, which is especially alarming considering how close they are to retirement.

While some people can choose to work longer in order to make up for financial losses, this isn't a practical choice for everyone. About 4% of those who were close to retirement said they intended to postpone retirement in order to deal with financial stress.

Historical Context and Current Challenges

The dangers of retiring during times of high inflation are further shown by historical evidence. The worst 30-year retirement era, according to Bill Bengen, the man behind the widely-cited 4% retirement spending rule, started on October 1, 1968. Notable features of this era included severe inflation that persisted for the majority of the 1970s and back-to-back bear markets that began in 1969 and 1973.

Similar to the difficulties encountered in previous decades, retirees now face a complex financial landscape. While Social Security benefits are indexed for inflation each year, many pensions in the private sector do not provide a comparable increase, thus pensioners in that sector are especially vulnerable to the depressing effects of inflation. This discrepancy shows that in order to lessen the negative effects of sustained high inflation on retirement savings, careful financial planning is necessary, as is the possibility of reassessing investment distributions. Jones Lang LaSalle employees should review their pension plans and adjust their investment strategies accordingly.

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The Rising Cost of Healthcare

Recent studies highlight the fact that rising healthcare expenditures present a further obstacle for retirees. According to a Fidelity Investments report released in April 2024, a couple planning to retire at age 65 should budget an average of $315,000 for non-Medicare healthcare costs during the course of their retirement. This number has risen by 5% over the prior year, greatly above the rate of ordinary inflation. This trend emphasizes how crucial it is to account for growing medical expenditures in retirement planning, especially for individuals who are approaching or at retirement age, since healthcare usually constitutes one of the biggest retirement expenses.

Navigating retirement in the face of rising prices is like trying to sail a boat through increasingly choppy waters. Retirees must modify their financial plans to deal with the erratic currents of inflation, just as a sailor must alter their sails and route to successfully navigate through stormy seas brought on by erratic winds. Similar to how the tide wears away at the coast, the continual increase in prices erodes the worth of their financial savings like a strong wind. Like seasoned sailors, prudent retirees will need to periodically reevaluate where they stand, make prudent use of their resources, and perhaps even change course to make sure they accomplish their retirement objectives safely and without running out of money. Jones Lang LaSalle employees should adopt these strategies to assist in a stable and shielded retirement despite the challenges posed by inflation.

What is the 401(k) plan offered by Jones Lang LaSalle?

The 401(k) plan at Jones Lang LaSalle is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax basis, helping them build a nest egg for retirement.

Does Jones Lang LaSalle match employee contributions to the 401(k) plan?

Yes, Jones Lang LaSalle offers a matching contribution to the 401(k) plan, which helps employees maximize their retirement savings.

How can employees at Jones Lang LaSalle enroll in the 401(k) plan?

Employees can enroll in the 401(k) plan at Jones Lang LaSalle by accessing the benefits portal or contacting the HR department for assistance.

What types of investment options are available in the Jones Lang LaSalle 401(k) plan?

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

When can employees at Jones Lang LaSalle start contributing to their 401(k) plan?

Employees at Jones Lang LaSalle can typically start contributing to their 401(k) plan after completing their initial eligibility period, which is outlined in the employee handbook.

Is there a vesting schedule for the employer match in the Jones Lang LaSalle 401(k) plan?

Yes, Jones Lang LaSalle has a vesting schedule for the employer match, which means employees must work for a certain period to fully own the matched contributions.

Can employees take loans against their 401(k) savings at Jones Lang LaSalle?

Yes, employees can take loans against their 401(k) savings at Jones Lang LaSalle, subject to specific terms and conditions outlined in the plan documents.

What happens to the 401(k) plan if an employee leaves Jones Lang LaSalle?

If an employee leaves Jones Lang LaSalle, they have several options for their 401(k) plan, including rolling it over to an IRA or a new employer's plan, or cashing it out.

How often can employees change their contribution rate to the Jones Lang LaSalle 401(k) plan?

Employees at Jones Lang LaSalle can change their contribution rate to the 401(k) plan at designated times throughout the year, as specified in the plan guidelines.

Are there any fees associated with the 401(k) plan at Jones Lang LaSalle?

Yes, there may be fees associated with the 401(k) plan at Jones Lang LaSalle, which are disclosed in the plan documents and can vary based on investment choices.

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

Plan Name: Jones Lang LaSalle Employee Pension Plan Years of Service and Age Qualification: Employees typically need to complete a minimum number of years of service to qualify for the pension plan. The specific requirements can vary based on the plan’s terms. Pension Formula: The pension formula used by Jones Lang LaSalle is based on factors such as years of service, salary history, and age at retirement. The exact formula can be found in the pension plan documentation. Qualification for 401(k) Plan: Eligibility for the 401(k) plan generally includes all full-time employees who meet certain service and age requirements. 401(k) Plan Name: Jones Lang LaSalle 401(k) Plan

Layoffs and Restructuring: In early 2023, Jones Lang LaSalle (JLL) announced a significant restructuring plan, including the reduction of around 5% of its global workforce. This move was attributed to the company's strategy to streamline operations and adapt to changing market conditions. The reduction affects various departments, particularly those in support functions. It’s important to follow this news given the current economic climate, as companies are reassessing their structures amid economic uncertainty and shifting investment priorities. Understanding these changes can provide insights into broader market trends and potential impacts on employee benefits and job security. Changes to Benefits and Retirement Plans: In mid-2023, JLL also updated its employee benefits, including modifications to its pension and 401(k) plans. The company reduced its matching contributions to 401(k) plans and revised its pension plan options to align with its new business strategy and cost management efforts. These changes come as part of JLL's broader efforts to optimize financial performance amid fluctuating economic conditions. Monitoring these adjustments is crucial as they reflect broader trends in corporate benefits adjustments, influenced by tax and investment factors, and can impact employee retirement planning and financial security.

Stock Options: Jones Lang LaSalle (JLL) offered stock options primarily to senior executives and high-level employees in 2022. The company used stock options to align executives' interests with shareholders' interests. JLL’s stock options were generally tied to performance metrics and long-term strategic goals. RSUs: In 2022, Restricted Stock Units (RSUs) at Jones Lang LaSalle (JLL) were granted to employees across various levels, including middle management and above. RSUs served as a retention tool and were often granted based on performance evaluations and tenure. JLL utilized RSUs to provide employees with ownership stakes in the company, typically vesting over a period of time.

Health Benefits Information: JLL provides a comprehensive benefits package, including medical, dental, and vision coverage. They also offer health savings accounts (HSAs) and flexible spending accounts (FSAs). Specific details for 2022-2024 can be found in the benefits section of their career page or employee handbook, though exact details may vary based on location and employment status. Acronyms and Terms: HSAs (Health Savings Accounts), FSAs (Flexible Spending Accounts), PPO (Preferred Provider Organization), HMO (Health Maintenance Organization).