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Oneok Retirees Should Be Mindful Under Spending, Here's Why

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Retirement can be quite challenging for the Oneok employees as they approach retirement age while at the same time facing various psychological barriers that affect the decision-making process concerning their finances,' said Tyson Mavar of The Retirement Group, a division of Wealth Enhancement Group.

This paper aims at exploring the challenges that Oneok employees face as they retire and the solutions to these challenges. Some of them, for instance, tend to have very conserved spending patterns which may hinder them from having a pleasant retirement life,' notes Wesley Boudreaux from The Retirement Group, a division of Wealth Enhancement Group.

Retirement Spending Trends: Here, the focus is on how Oneok retirees spend their retirement funds, and their preference for fixed income sources such as Social Security and pensions.
Psychological Barriers in Financial Decisions: In this article, the author discusses the effects of loss aversion and the need for personal insurance against risks such as longevity, medical expenses, and market risks on the retirement spending of retirees.
Strategic Financial Tools for Retirement: HSA, annuities, and long-term care insurance are reviewed with respect to how they can improve the quality of life and financial security of retirees in retirement.

In a world where people spend much time and energy into building up large retirement funds, a large proportion of Oneok retirees can be seen to exhibit a cautious approach to spending, with a large proportion of them preferring to receive income from fixed interest assets such as Social Security and pensions. Although this caution seems prudent, it may deny many people the opportunity of a pleasant retirement lifestyle that befits their age and the savings they have made.

The conventional approach to retirement planning has been based on the consume down approach for instance the famous “4% rule” which states that one should only withdraw 4% of the retirement portfolio every year. This minimizes the risks of running out of money. However, the theoretical framework does not fit with the actual behavior of retirees, and data shows that this is the case. New York Life launched a survey in 2023 and according to the survey, only 16% of the seniors make regular withdrawals from their retirement accounts, and 30% do not make any withdrawals at all. This is a very bad trend. This departure from theoretical spending models thus suggests that retirees are generally cautious, and they tend to prefer to hold on to their money rather than maximize their retirement income.

Some other information from the 2022 Insured Retirement Institute (IRI) Fact Book and the Society of Actuaries also shows that there is an ironic situation in the spending behavior of the retirees:

Even though the ability to maintain a comfortable standard of living is of great concern, there is a tendency to leave the portfolio assets untouched. This shows that there is a more serious fear of ‘eating’ one’s 'nest egg' even when there are enough assets to provide for a more enjoyable and fulfilling retirement.

The effects of this conservative spending behaviour are not zero. It is crucial to understand the underlying psychological and behavioral factors that affect this problem, including loss aversion and the need to insure oneself against losses such as longevity, medical expenses, and market risks when helping people with this issue.

The evidence clearly suggests:

There is a need to include assurances into retirement planning for Oneok retirees and their ability and willingness to spend during retirement can be enhanced. The literature has time and again posed that retirees who have fixed income sources such as Social Security, pensions, or annuities have higher levels of spending and therefore report higher levels of satisfaction with their retirement. Specifically, an 8% increase in spending has been found to be associated with the presence of annuity income, which is important in enhancing comfort and financial security during retirement.

Furthermore, it is possible to use insurance products wisely, including long-term care insurance, to address some of the risks that are inherent in retirement, particularly those related to longevity and healthcare. The Oneok retirees can prevent themselves from having to rely on their own savings by buying insurance to cover these risks and, therefore, enjoy a more active and fulfilling retirement. Financial advisors are leading the way in this revolution in retirement planning. Advisors can help seniors overcome behavioral biases by recommending concepts that convert the money that has been accumulated to produce a steady stream of retirement income that includes both income and insurance benefits.

This method not only enhances the financial security of the Oneok retirees but also enhances their quality of life in retirement and allows them to enjoy themselves doing the things they love without worrying about the money running out. In conclusion, there are numerous ways to have a fulfilling retirement and this includes accumulating wealth and using it properly to sustain the desired standard of living. By adopting a balanced approach that focuses on income production and risk management through insurance products, Oneok retirees can successfully navigate the complexities of financial planning and achieve a retirement that reflects their efforts and dreams. According to a recent survey conducted in 2023 by the Employee Benefit Research Institute (EBRI), more Oneok retirees are using Health Savings Accounts (HSAs) as a strategic tool to manage their retirement healthcare expenses.

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The survey revealed that HSAs, which are most famous for their triple tax advantage, are now being viewed as more valuable as long-term investments in addition to their ability to fund present day health-related expenses. Retirees are able to contribute to Health Savings Accounts (HSAs) that are tax exempt and so them and their employers are able to build up funds that can be used without tax being paid on them for permitted health related expenses in retirement. This helps to overcome a large number of the retirement spending problems that are linked to health care.

This realization shows that it is important to consider other financial tools in the retirement planning process in order to help lead a pleasant retirement. For Oneok retirees and employees, retirement planning is like painstakingly getting ready for an epic ocean cruise. Just as a veteran mariner lays in stores and sets a course, then checks that he has made all the preparations for the storms that he may encounter on the journey, so retirees save, invest and plan for a financially secure future. But when they finally leave for the smooth waters of retirement, many of them are reluctant to part with the funds they have so carefully accumulated, as a captain of a ship would approach his task cautiously even after having made all the necessary preparations.

To ensure that the journey not only arrives at the destination but also enjoys the way, this article guides retirees through these waters with the stars of health savings accounts, systematic withdrawal strategies, and income sources.

Sources:

1. RetireGuide: 'Average Retirement Spending in 2025 + Budgeting Tips.' RetireGuide, www.retireguide.com/retirement-life-leisure/average-retirement-spending/ . Accessed 2 Feb. 2025. J.P.

2. Morgan Asset Management: 'Three New Spending Surprises.' J.P. Morgan Asset Management, am.jpmorgan.com/us/en/asset-management/adv/insights/retirement-insights/guide-to-retirement/spending-surprises/. Accessed 2 Feb. 2025.

3. Kitces.com: Stein, Michael. 'How Total Spending Declines Over Time In Retirement.' Kitces.com, www.kitces.com/blog/retirement-spending-smile-needs-rising-medical-costs-go-go-slow-go-no-go-years/ . Accessed 2 Feb. 2025.

4. Fidelity: Zhao, Beau. 'How Much Will You Spend in Retirement?' Fidelity, www.fidelity.com/viewpoints/retirement/how-much-will-you-spend . Accessed 2 Feb. 2025.

5. Annuity.org: Malone, Malori. '50+ Essential Retirement Statistics for 2025: Demographics.' Annuity.org, www.annuity.org/retirement/retirement-statistics/ . Accessed 2 Feb. 2025.

What specific factors does ONEOK, Inc. consider when determining an employee's eligibility for retirement benefits, and how do these factors align with commonly understood retirement planning principles in the context of the ONEOK, Inc. Retirement Plan?

Eligibility Factors: ONEOK, Inc. considers several factors when determining eligibility for its retirement plan, such as date of hire, age, and participation in certain programs like the Profit Sharing Plan. Employees must have been hired before January 1, 2005, and must meet the minimum age of 21 to be eligible(ONEOK_Inc_Retirement_Pl…). These factors align with common retirement planning principles, such as ensuring long-term employment and participation in benefit programs.

How does the structure of the ONEOK, Inc. Retirement Plan impact the financial planning strategies of employees who are nearing retirement age, particularly in relation to their final average earnings and years of credited service?

Plan Structure and Financial Planning: The ONEOK Retirement Plan uses a formula based on Final Average Earnings and Years of Credited Service. This structure impacts employees' financial planning, as it encourages maximizing years of service and optimizing earnings in the final years before retirement(ONEOK_Inc_Retirement_Pl…). Employees nearing retirement should focus on maximizing both variables for a stronger financial outcome.

In what ways can changes to the IRS limits in 2024 affect the retirement planning of employees participating in the ONEOK, Inc. Retirement Plan, and how can they adapt their strategies to accommodate these changes?

IRS Limits and Impact on Planning: Changes to IRS limits, such as increases in contribution caps or income thresholds, could affect employees’ ability to defer taxes and maximize savings(ONEOK_Inc_Retirement_Pl…). Employees can adapt by adjusting their contributions to their 401(k) or other retirement accounts in line with new limits, ensuring they stay within allowable tax advantages.

For employees considering early retirement, what are the implications of selecting this option under the ONEOK, Inc. Retirement Plan compared to waiting for normal retirement benefits, and what should they consider regarding potential reductions in benefits?

Early Retirement vs. Normal Retirement: Opting for early retirement under the ONEOK Plan can lead to a reduction in benefits, as payments are reduced based on the Early Retirement Benefit Reduction Schedule(ONEOK_Inc_Retirement_Pl…). Employees should consider their financial needs and health before making this decision, as waiting until normal retirement age results in higher monthly benefits.

How does the process for applying for retirement benefits at ONEOK, Inc. work, and what specific documentation and timelines should employees be prepared to navigate in order to ensure a smooth transition into retirement?

Retirement Application Process: Employees must request a retirement estimate online or through HR, and submit retirement forms and documentation to initiate benefits(ONEOK_Inc_Retirement_Pl…). Timely submission is key to ensure a smooth transition, and benefits usually begin the first of the month after retirement.

What options are available to employees of ONEOK, Inc. if they wish to change their designated beneficiaries in the retirement plan, and how can they ensure that these changes are executed properly?

Changing Beneficiaries: Employees can change their designated beneficiaries by submitting a pre-retirement death beneficiary form(ONEOK_Inc_Retirement_Pl…). Spousal consent is required for changes that involve someone other than the spouse, and notarization is needed to ensure proper execution.

How does ONEOK, Inc. manage the investment of its retirement plan assets, and what guidelines are in place to ensure that participants' funds are invested prudently and in alignment with their retirement goals?

Investment Management: ONEOK manages its retirement plan assets in a trust, with investments overseen by plan fiduciaries following an investment policy(ONEOK_Inc_Retirement_Pl…). This policy ensures that funds are invested prudently, balancing risk and returns in alignment with participants' retirement goals.

In terms of employee rights under ERISA, what recourse do employees of ONEOK, Inc. have if they believe their benefits are being mismanaged or if they encounter issues when filing claims related to their retirement benefits?

ERISA Rights and Recourse: Employees have rights under ERISA, including the ability to file claims and appeals if they believe their benefits are being mismanaged(ONEOK_Inc_Retirement_Pl…). If claims are denied, they can appeal and ultimately take legal action under Section 502(a) of ERISA if necessary.

What procedures does ONEOK, Inc. have in place for communicating changes to the retirement plan, and how can employees stay informed about updates that may affect their benefits or retirement planning?

Plan Updates and Communication: ONEOK communicates changes to its retirement plan through electronic and physical notices(ONEOK_Inc_Retirement_Pl…). Employees are encouraged to stay updated by regularly reviewing these communications and contacting HR if they need clarification.

How can employees of ONEOK, Inc. reach out for additional information regarding the retirement plan, and what are the best practices for utilizing the resources available for retirement planning assistance?

Accessing Retirement Information: Employees can contact ONEOK HR Solutions or access the Employee Self-Service platform for detailed information about their retirement plan(ONEOK_Inc_Retirement_Pl…). Best practices include regular consultations with HR to stay informed and plan effectively for retirement.