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Balancing Social Security and Investments: A Comprehensive Retirement Guide for Bank of New York Mellon Employees

Healthcare Provider Update: Healthcare Provider for Bank of New York Mellon The primary healthcare provider for Bank of New York Mellon (BNY Mellon) is EmblemHealth, which offers a range of plans catering to the needs of the company's employees. Potential Healthcare Cost Increases in 2026 As we approach 2026, healthcare costs are expected to rise significantly, driven by a combination of factors. Data reveals that many states are facing record premium hikes for Affordable Care Act plans, with some projections showing increases exceeding 60%. The potential expiration of enhanced federal premium subsidies will compound these challenges, resulting in over 22 million ACA marketplace enrollees possibly seeing their out-of-pocket premiums jump by upwards of 75%. This surge in costs is indicative of a broader trend affecting healthcare affordability for many Americans, intensifying pressure on already strained household budgets. Click here to learn more

In the realm of retirement planning, Bank of New York Mellon employees face numerous dimensions that go beyond mere tax calculations, highlighting a blend of financial and non-financial considerations essential for a holistic approach. Christine Benz, in her latest work 'How to Retire: 20 Lessons for a Happy, Successful and Wealthy Retirement,' together with Social Security professional Mary Beth Franklin, explores the implications of filing for Social Security early and the potential of investing those funds in the market.

Christine Benz, a noted retirement strategy professional, emphasizes the importance of recognizing that retirement planning is more than a series of calculations; it is a deep dive into the next phase of life. Her discussions with Mary Beth Franklin offer subtle insights into strategic considerations, including the possibility of early Social Security benefits claims to leverage in the investment market.

Exploring Early Social Security Claims Through an Investor's Lens

The debate on early Social Security claims is characterized by the possibility of outpacing the benefits of deferred claims through savvy investments. Mary Beth Franklin highlights the inherent diversity in this method: investment returns can vary significantly, leading to substantial gains or losses. The stability of a risk-free investment like a Certificate of Deposit (CD) contrasts sharply with the potential volatility of the stock market. Historical data shows that over the past decade, CDs and similar vehicles have offered minimal returns, while deferring Social Security could result in an 8% annual increase in benefits for Bank of New York Mellon employees.

Considering Social Security's Cost of Living Adjustments

Since 1975, Social Security benefits have been adjusted for inflation, ensuring that retirees' purchasing power does not diminish over time. This adjustment, tied to the Consumer Price Index, has seen fluctuations, with a significant increase of 8.7% in 2023, the largest in over 40 years, followed by a 3.2% increase in 2024 . These adjustments claim that even before claiming Social Security, any inflation-related increases are factored into future benefits, reinforcing the program's role in maintaining financial stability amid inflationary pressures for Bank of New York Mellon retirees.

Breakeven Analysis: A Tool to Anticipate Social Security Claims

Breakeven analysis is critical for deciding when to claim Social Security benefits. This analytical method determines how long it takes to financially benefit from delaying Social Security claims. For instance, claiming reduced benefits at 62 versus waiting until 70 can result in significant lifetime financial differences, with breakeven points varying based on individual circumstances. Notably, a person living beyond the age of 78 would benefit from more lifetime benefits if they delay claiming until full retirement age or later, a strategic decision for Bank of New York Mellon employees.

Marital Considerations in Claiming Strategies

The implications of Social Security decisions extend beyond individual circumstances, particularly concerning married couples. When one spouse passes before claiming their benefits, the surviving spouse is entitled to survivor benefits, which can be a significant financial resource. In cases where one spouse outlives the other by many years, these benefits can provide substantial financial support, highlighting the importance of strategic planning to optimize Social Security benefits at Bank of New York Mellon.

Psychological and Strategic Consequences of Early Claiming

Mary Beth Franklin underscores the psychological factors that motivate early claims, such as concerns about the program's solvency and the desire to 'take the money and run.' However, this strategy can lead to significant financial reductions, akin to selling assets in a declining market. These decisions result in financial losses, emphasizing the importance of making choices based on sound legal and financial advice rather than fear or speculation.

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In conclusion, strategic considerations regarding when and how to claim Social Security are complex and depend on a variety of factors such as market conditions, personal health, and marital status. Retirement professionals emphasize the importance of viewing Social Security claims through an investment lens, considering potential market returns versus increases from deferred benefits.

As we continue to face this decision, it is clear that adopting a comprehensive approach, which carefully balances the guaranteed benefits of delayed Social Security against potential gains from other investment sources, is of paramount importance. This perspective not only aids in a more stable financial situation but also closely aligns with the realities of age and longevity in our current society.

According to research, it is crucial for individuals approaching retirement to diversify their income sources. A study by the American Association of Retired Persons (AARP) in August 2024 shows that retirees who supplement their Social Security with diverse income sources, such as IRAs, 401(k)s, and personal investments, report a 20% higher post-retirement financial satisfaction. This method reduces dependence on Social Security alone and provides a shield against market volatility, suggesting a strategic mix of delayed Social Security claims and targeted investments to optimize retirees' financial outcomes, especially valuable for those at Bank of New York Mellon planning for a stable and successful retirement.

What types of retirement savings plans does Bank of New York Mellon offer to its employees?

Bank of New York Mellon offers a 401(k) plan as part of its retirement savings options for employees.

How can I enroll in the 401(k) plan at Bank of New York Mellon?

Employees can enroll in the Bank of New York Mellon 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.

Does Bank of New York Mellon provide matching contributions to the 401(k) plan?

Yes, Bank of New York Mellon offers a matching contribution to the 401(k) plan, which helps employees boost their retirement savings.

What is the vesting schedule for the Bank of New York Mellon 401(k) matching contributions?

The vesting schedule for Bank of New York Mellon’s matching contributions typically follows a standard schedule, which can be confirmed in the employee handbook or by contacting HR.

Can I change my contribution rate to the 401(k) plan at Bank of New York Mellon?

Yes, employees at Bank of New York Mellon can change their contribution rate to the 401(k) plan at any time, subject to certain guidelines.

What investment options are available in the Bank of New York Mellon 401(k) plan?

The Bank of New York Mellon 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How often can I make changes to my investment selections in the Bank of New York Mellon 401(k) plan?

Employees can typically make changes to their investment selections in the Bank of New York Mellon 401(k) plan on a regular basis, often daily or monthly.

Is there a loan provision available in the Bank of New York Mellon 401(k) plan?

Yes, Bank of New York Mellon allows employees to take loans against their 401(k) savings, subject to certain conditions and limits.

What happens to my 401(k) account if I leave Bank of New York Mellon?

If you leave Bank of New York Mellon, you have several options for your 401(k) account, including rolling it over to an IRA or a new employer’s plan, or cashing it out.

Are there any fees associated with the Bank of New York Mellon 401(k) plan?

Yes, there may be fees associated with the Bank of New York Mellon 401(k) plan, which can include administrative fees and investment-related fees. Employees can review the fee structure 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.

Bank of New York Mellon has announced a significant reduction in its workforce, with layoffs expected to affect around 5% of its employees by the end of 2024.

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For more information you can reach the plan administrator for Bank of New York Mellon at 240 Greenwich St New York, NY 10286; or by calling them at +1 212-495-1784.