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Understanding the Inflation Challenge for Nordson Retirees: What You Need to Know

Healthcare Provider Update: Nordson offers a comprehensive benefits package to its U.S. employees, including medical, dental, vision, and prescription coverage. The company supports employee wellness through HSAs, FSAs, and a wellbeing program. Retirement benefits include both traditional and Roth 401(k) options, life insurance, and disability coverage. Nordson also provides paid time off, adoption reimbursement, and tuition assistance5. Healthcare costs in the United States are projected to continue rising through 2026, with insurers proposing significant premium increases for Affordable Care Act (ACA) plans. A recent analysis found that ACA insurers are seeking a median premium increase of 15% for 2026, marking the largest hike since 2018. This surge is attributed to factors such as the anticipated expiration of enhanced premium tax credits, rising medical costsincluding expensive medications and increased hospital staysand a shift in the risk pool towards higher-cost enrollees. Without the renewal of enhanced subsidies, out-of-pocket premiums for ACA marketplace enrollees could increase by more than 75% on average. 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. Nordson 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. Nordson 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. Nordson 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. Nordson employees should adopt these strategies to assist in a stable and shielded retirement despite the challenges posed by inflation.

How does the Nordson Corporation Salaried Employees Pension Plan calculate an employee's Accrued Benefit, and what factors need to be considered to ensure accurate pension benefits at retirement? Understanding the components that contribute to the calculation is crucial for employees planning their retirement through Nordson Corporation.

Accrued Benefit Calculation: Nordson Corporation calculates an employee’s Accrued Benefit based on the Final Average Monthly Pay, the number of Years of Benefit Service, and an estimate of the employee’s Social Security benefit. The formula used includes a reduction if an employee has less than 30 Years of Benefit Service(Nordson Corporation_Feb…).

What are the eligibility criteria for joining the Nordson Corporation Salaried Employees Pension Plan, and how can employees determine their vesting status as they approach retirement? It is essential for employees to be aware of the timelines and requirements necessary to fully benefit from the retirement plan offered by Nordson Corporation.

Eligibility Criteria: Employees become eligible for the Nordson Corporation Salaried Employees Pension Plan after completing a Year of Eligibility Service, which requires at least 1,000 hours of work annually. Vesting occurs after completing 5 Years of Vesting Service, ensuring full entitlement to benefits(Nordson Corporation_Feb…).

In what ways can employees at Nordson Corporation access information about their pension plan benefits, and what steps should they follow if they believe their claims for benefits were denied? Knowing the appropriate channels for receiving information can help employees navigate any discrepancies with their pension benefits.

Accessing Pension Information and Claiming: Employees can access their pension plan details through John Hancock’s website or phone service. If a benefit claim is denied, employees can follow the claims procedure outlined by Nordson, which includes submitting a written request and appealing decisions(Nordson Corporation_Feb…).

What options does Nordson Corporation provide for early retirement, and how can employees assess whether an early retirement is financially feasible for them? Understanding the implications of early retirement can significantly impact an employee's long-term financial security.

Early Retirement Options: Nordson Corporation offers early retirement options starting at age 55, with at least 5 years of vesting service. Benefits are reduced by 6% per year for each year that early retirement is taken before the Normal Retirement Date(Nordson Corporation_Feb…).

How does Nordson Corporation's pension plan ensure that employees receive monthly benefits post-retirement, and what are the different forms of payment available to retirees? Grasping the payment structures may help employees make informed decisions regarding their retirement income.

Monthly Benefit Payments: Employees retiring from Nordson Corporation can choose various payment methods, including a Life Annuity or a 50% Joint & Survivor Annuity for married participants. Payments start after the Normal Retirement Date or early retirement, depending on the selected option(Nordson Corporation_Feb…).

What rights do participants have under the Employee Retirement Income Security Act (ERISA) concerning their Nordson Corporation pension plan, and what should they do to enforce these rights effectively? Employees should be aware of their rights to protect themselves during the benefit claiming process.

ERISA Rights: Under ERISA, participants have the right to receive information about their benefits, file claims, and sue if benefits are denied. Plan fiduciaries must act in the best interest of employees, and participants are protected from retaliation for asserting their rights(Nordson Corporation_Feb…).

How does the termination or amendment of the Nordson Corporation Salaried Employees Pension Plan affect employees' accrued benefits, and what protections are in place? Awareness of these scenarios can help employees better plan their financial futures in relation to their pensions.

Plan Termination or Amendment: If the plan is terminated or amended, accrued benefits cannot be reduced, and employees’ benefits become 100% vested. This ensures that employees retain the benefits they have earned up to the point of the change(Nordson Corporation_Feb…).

In what situations might employees at Nordson Corporation lose their pension benefits, and what preventative actions can they take to ensure they remain eligible for these benefits? Understanding the risks involved in pension plans can aid employees in maintaining their retirement security.

Loss of Pension Benefits: Employees may lose pension benefits if they leave Nordson Corporation before vesting or fail to select appropriate survivor options. Keeping the Plan Administrator informed of current contact information is crucial to avoid losing benefits(Nordson Corporation_Feb…).

How can employees at Nordson Corporation address questions or concerns related to their retirement planning, and what resources are available for personalized assistance? Access to proper resources is vital for employees needing guidance throughout their retirement journey.

Retirement Planning Resources: Employees can contact the Plan Administrator or use John Hancock’s automated services to address questions about retirement planning. Personalized assistance is available for any specific pension-related inquiries(Nordson Corporation_Feb…).

What steps should employees take to contact Nordson Corporation or the Plan Administrator to get detailed information about their pension plan, and what should they include in their inquiries to ensure a comprehensive response? Effective communication techniques can significantly enhance employees' understanding of their benefits. These questions have been designed to help employees of Nordson Corporation navigate their pension plan and retirement effectively.

Contacting the Plan Administrator: Employees can contact Nordson Corporation or the Plan Administrator by calling the number listed in the Summary Plan Description. It’s advisable to provide detailed questions regarding benefit amounts, vesting status, or payment options to receive a thorough response(Nordson Corporation_Feb…).

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

Pension Plan Name: Nordson Corporation Retirement Plan Qualification Criteria: Years of Service: Generally requires a minimum of 5 years. Age Qualification: Typically eligible at age 65. Pension Formula: Formula is based on a percentage of final average salary and years of service. 401(k) Plan Name: Nordson Corporation 401(k) Savings Plan Qualification Criteria: Employees are eligible to participate after completing 30 days of service. Company Contribution: Nordson matches employee contributions up to a certain percentage.

News: In early 2024, Nordson Corporation announced a significant restructuring plan, including a reduction of approximately 5% of its global workforce. This move was part of a broader strategy to streamline operations and improve overall efficiency. The company also updated its employee benefits package, including modifications to its pension and 401k plans. Specific changes included adjusting the company’s matching contributions and modifying pension benefit accrual rates.

Nordson Corporation (NDSN) provides stock options and RSUs to employees as part of their compensation packages. Stock options at Nordson Corporation (NDSN) are generally granted to senior executives and key employees based on performance and tenure. RSUs are also awarded to employees as a form of long-term incentive, typically vesting over a period of time.

Benefits Overview: Nordson's official site provides information on various health benefits including medical, dental, and vision insurance plans. Employees have access to comprehensive health coverage, which typically includes options for health savings accounts (HSAs) and flexible spending accounts (FSAs). Recent Updates: The company has updated its benefits plans over the years. Specific changes for 2022, 2023, and 2024 can be found in their annual benefits summaries or employee communications.