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Avient Employees: Discover How to Avoid a Costly $130,000 Oversight in Your Retirement Planning

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A recent study by Vanguard highlights a critical aspect in the management of IRA rollover accounts, which could lead to significant financial consequences for Avient employees, potentially missing out on up to $130,000 in investments. This understanding comes from an analysis of the retirement system, which stipulates that IRAs should primarily allocate direct contributions and most cash inputs by default. While 401(k) plans offer investment options focused on defaults, such as target-date funds, IRAs take a less aggressive investment approach.

Vanguard's findings reveal a significant lack of awareness among IRA holders, including Avient employees, about their real investment allocations. A staggering two-thirds of those surveyed were unable to correctly identify their investments in their IRAs, with only one-third acknowledging having made a deliberate choice to keep their funds in cash. This is problematic considering the historical performance of cash investments compared to equities and other financial instruments.

According to a longitudinal study tracking IRA rollovers since 2015, Vanguard discovered that 28% of these accounts remained entirely in cash seven years later. This static approach has led to a significant loss of potential profits.

Vanguard estimates that, on average, individuals under 55, including Avient employees, who transfer their IRA investments from cash to a target-date fund could see their retirement assets increase by at least $130,000 by the age of 65. Given that the average retirement account amounts to about $88,000, an addition of $130,000 can significantly bolster retirement preparedness.

Moreover, Vanguard estimates that Americans collectively lose about $172 billion in potential investments each year due to common fund allocations in IRAs. This figure likely underestimates the overall impact as it only accounts for rollovers and not direct contributions, which are typically invested in cash by default.

This issue disproportionately impacts young investors, low-income workers, and women—groups already at a disadvantage in building substantial retirement reserves.

Additionally, Vanguard supports legislative changes regarding IRA default investment strategies following those of Avient's 401(k) plans, which were reformed under the Pension Protection Act of 2006 . This act allowed 401(k) plans to automatically invest contributions into default options such as benchmark funds, unless the investor decides otherwise. Implementing a similar framework for IRAs could greatly enhance the long-term financial security of many investors.

While legislative reform may offer a comprehensive solution, investment firms also play a crucial role in steering IRA investors toward more effective asset management strategies. Encouraging Avient investors to regularly review and adjust their investment choices can significantly improve their retirement outcomes.

Addressing the inefficiencies of IRA investment strategies is not a complete solution to the retirement savings crisis, but it is an essential step towards reducing financial vulnerabilities, especially for those in the latter half of the socioeconomic spectrum. This strategic evolution can bring numerous benefits globally, enhancing financial stability for future Avient retirees.

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A study conducted by the Economic Policy Institute (2022) underscores the crucial importance of diversification in retirement portfolios. According to the study, individuals approaching retirement can bolster their resilience to market volatility by incorporating a mix of stocks, bonds, and other assets, rather than relying solely on their traditional savings or cash equivalents. This varied approach not only reduces risks but also optimizes potential gains, crucial for those at the end of their wealth accumulation phase and looking to ensure their financial stability in retirement.

Keeping your IRA investments in cash is like anchoring a boat in calm waters while a favorable wind passes by. Just as the boat fails to harness the wind to reach new captivating destinations or swiftly return to port, keeping your IRA funds in liquid form means missing out on the tremendous growth opportunities offered by equities and target-date funds. Over time, just as the boat remains stationary, the value of cash savings can be eroded by inflation, preventing your retirement savings from realizing their full potential and impacting your financial freedom during your golden years. Avient employees should heed this advice to maximize their retirement outcomes.

What is the purpose of Avient's 401(k) Savings Plan?

The purpose of Avient's 401(k) Savings Plan is to help employees save for retirement by allowing them to contribute a portion of their salary into a tax-advantaged account.

How can employees enroll in Avient's 401(k) Savings Plan?

Employees can enroll in Avient's 401(k) Savings Plan by accessing the enrollment portal through the company's HR website or by contacting the HR department for assistance.

What types of contributions can employees make to Avient's 401(k) Savings Plan?

Employees can make pre-tax contributions, Roth (after-tax) contributions, and in some cases, catch-up contributions if they are age 50 or older in Avient's 401(k) Savings Plan.

Does Avient offer a company match on 401(k) contributions?

Yes, Avient offers a company match on employee contributions to the 401(k) Savings Plan, which helps to enhance overall retirement savings.

What is the vesting schedule for Avient's 401(k) company match?

The vesting schedule for Avient's 401(k) company match typically follows a graded schedule, meaning employees earn ownership of the company match over a period of time.

Can employees take loans against their 401(k) accounts at Avient?

Yes, Avient allows employees to take loans against their 401(k) accounts, subject to certain limits and repayment terms as outlined in the plan documents.

What investment options are available in Avient's 401(k) Savings Plan?

Avient's 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

How often can employees change their contribution amounts to Avient's 401(k) Savings Plan?

Employees can change their contribution amounts to Avient's 401(k) Savings Plan at any time, typically through the online portal or by contacting HR.

What happens to an employee's 401(k) account if they leave Avient?

If an employee leaves Avient, they can choose to leave their funds in the plan, roll them over to another qualified retirement account, or cash out, subject to taxes and penalties.

Are there any fees associated with Avient's 401(k) Savings Plan?

Yes, there may be administrative fees and investment-related fees associated with Avient's 401(k) Savings Plan, which are disclosed in the plan documents.

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

Avient has announced a significant restructuring effort, which includes layoffs across multiple departments. This move is part of a broader strategy to streamline operations and improve financial performance. The company is also modifying its pension plans and benefits to align with its new organizational structure.