The Retirement Red Zone

The right investment allocation is going to be different from one individual to another, but there are three main components we think you should take into account when choosing the investments in your 401(k): 1. Diversification 2. Risk tolerance 3. Time until retirement. We recommend using the resources available to you through Participant Services and/or working with your advisor to come up with your optimal investment allocation.

Three main factors affect the value of your pension benefit estimate: 1. How long you’ve been working for Verizon (the longer you have worked for Verizon, the higher your monthly pension benefit estimate) 2. Interest rates (higher interest rates result in lower pension lump sum estimates and vice versa) 3. Your age (the older you are, the lower the pension lump sum estimate)

Everybody’s ideal contribution amount is going to be different depending on monthly expenses compared to your income. If you’re able to, however, you should strive to contribute at least enough to your 401(k) to take advantage of the full employer match. This would be 6 percent of your income for all associates and managers.

You can request a check (make sure it’s made payable to the institution at which your individual retirement account is at so that you don’t have to withhold taxes) and can then deposit that check into your retirement account. You can also request a direct rollover from your 401(k) to your retirement account without receiving a check first. 401(k) rollover initiation requests can be done by calling Fidelity at 1-888-457-9333.

Additional options include:

• Leave the money in your former employer’s plan, if permitted
• Roll over the assets to your new employer’s plan, if one is available and rollovers are permitted
• Cash-out the account value

You must initiate your pension benefit commencement through the Pension Election and Authorization form. This will be provided to you by the Verizon Benefits Center. You can request this paperwork by calling them at 1-855-489-2367.

There are a lot of moving parts to the pension benefit commencement process, and it’s important to carry them out correctly so that you are maximizing your benefit and receiving that benefit in a timely manner. This is, therefore, usually a part of the retirement process that we assist our clients with. Please do reach out to us if you would like a partner in this process.

Not outliving your money in retirement is one of the biggest concerns and focuses when planning for retirement. We recommend if you haven’t already, take inventory of your expense components and income resources in retirement and project your monthly and annual cash flows. This will help determine a withdrawal game plan for your investments throughout your retirement.

Yes! You can always reach out to the Benefits Center if you’re not sure where to go to get a question answered or to gather information about your retirement benefits. A few reasons for a retiree to reach out to the Benefits Center include 1. Questions about healthcare coverage 2. If you elected the annuity payout option for the pension and you have service-related requests/questions 3. Life insurance questions

For those who take the lump sum distribution option, that asset is now yours outright and is not tied to the financial status of Verizon as the sponsoring company. For those who take the annuity option, a portion of your benefit may be in jeopardy if Verizon were to deal with financial troubles, depending on the extent of that financial hardship. The PBGC (Pension Benefit Guaranty Corporation) is meant to protect a portion of your annuity income so that the entire benefit is not lost.

The right date to start taking your Social Security benefit is different for everyone and is an extremely personal decision. There are several components everyone should keep in mind when making this decision: 1. Income needs in retirement 2. Income resources you can depend on besides Social Security 3. Family longevity history (and therefore your projected longevity). There are also several timing strategies that can be used between two spouses to start one’s benefits earlier and delay/grow the other spouse’s (eligibility for these strategies depends on the year in which you were born).