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Healthcare Provider Update: Healthcare Provider for HP Hewlett-Packard, commonly known as HP, offers a variety of health insurance plans through large national insurers including UnitedHealthcare, Aetna, and Anthem. The choice of provider may depend on the region and specific employee benefits plan that HP provides to its workforce. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are projected to rise significantly for consumers, particularly those enrolled in Affordable Care Act (ACA) marketplace plans. With some states expecting premium hikes exceeding 60%, many consumers may find their out-of-pocket costs increasing by over 75% due to the expiration of enhanced federal premium subsidies and rising medical costs. Insurers have cited a combination of escalating healthcare expenses and the need for aggressive rate adjustments to maintain profitability as key factors behind these anticipated increases. As this scenario unfolds, it will be crucial for individuals to carefully assess their healthcare options for the coming year. Click here to learn more
What Is Delayed Retirement From HP?
In General
According to a recent report by the National Institute on Retirement Security, nearly four out of five working Americans with retirement accounts have less than one times their annual salary saved for retirement by age 40, which can have a significant impact on their retirement lifestyle. This means that it's more important than ever for individuals to start planning and saving for retirement early on in their careers to ensure a comfortable retirement. With this in mind, it's crucial for individuals in their 60s, whether already retired or planning to retire soon, to take a close look at their retirement savings and make any necessary adjustments to secure their financial future.
If you cannot afford to retire from HP yet or if you still appreciate working, you may wish to delay your retirement. This could mean continuing to work full-time or part-time for HP or a different employer to supplement your retirement income. This could also involve starting your own enterprise. In any event, a delayed retirement entails continuing to earn at least some income through employment as an alternative to full-time retirement leisure mode.
Why Work After You Retire From HP?
Obviously, if you delay your retirement from HP or work part-time during retirement, you will earn money and rely less on your retirement savings, allowing more to grow for the future and extending your savings. You may have access to affordable health care if you continue to work, as an increasing number of employers offer this essential benefit to part-time employees. However, there are also noneconomic reasons to labor during retirement. Numerous retirees work for personal satisfaction — to remain mentally and physically active, to enjoy the social benefits of working, and to try their hand at something new — the reasons are as diverse as the number of retirees.
Social Security Benefits
You can delay receiving Social Security benefits beyond the age of complete retirement eligibility. If you do so, your Social Security benefits may increase for two reasons. The first is that each year you continue to work adds an additional year of earnings to your Social Security record, which could result in higher retirement benefits. Second, you will receive delayed retirement credits that increase your benefit by a specified percentage for each month you delay retirement (up to age 70). The percentage increase varies based on the year of birth. For our HP clients who were born after 1943, the annual growth rate is 8%.
Example(s): Hal works at the local nuclear power plant. He wants to work past the normal retirement age and delay his Social Security retirement benefits. Since Hal was born in 1944, he is eligible for a delayed retirement credit of 8% for each year that he works past the normal retirement age, up to age 70.
Caution: Although you can delay your Social Security retirement benefits, you still have to sign up for Medicare once you reach age 65.
If you continue to work after beginning to receive Social Security retirement benefits, your earnings may impact the quantity of your benefit check. Your monthly benefit is determined by your lifetime income. When you become eligible for retirement benefits at age 62, the Social Security Administration calculates your primary insurance amount (PIA), which will serve as the foundation for your retirement benefit. Annually, your PIA is recalculated if you have new earnings that could increase your benefit.
If you continue to work after you begin receiving Social Security retirement benefits, your earnings may increase your PIA and, consequently, your future benefit. However, our HP clients must be aware that employment may result in a reduction of their current benefits. If you've reached full retirement age (65 to 67 years old, depending on when you were born), you can earn as much as you want without affecting your Social Security retirement benefit.
If you have not yet reached your full retirement age, $1 in benefits will be withheld for every $2 over the annual earnings limit ($18,240 in 2020) that you earn. In the first year of your Social Security retirement, a special rule applies: you will receive your full benefit for any month in which you earn less than one-twelfth of the annual earnings limit, regardless of how much you earn for the entire year. In the year you attain full retirement age, a higher earnings cap applies.
If you earn more than this higher limit ($48,600 in 2020), $1 in benefits will be withheld for every $3 you earn over this amount until the month you reach full retirement age, at which point you will receive your full benefit regardless of your income. (If your current benefit is reduced due to excess earnings, you may be eligible for a benefit increase once you reach full retirement age.) Additionally, we would like to remind our HP clients that not all income reduces Social Security benefits. In general, Social Security only considers wages earned as an employee, net earnings from self-employment, and bonuses, commissions, and fees. Your benefit will not be reduced by pensions, annuities, IRA distributions, or investment income.
Additionally, we would like our HP clients to keep in mind that working may allow delaying Social Security benefits. In general, the longer you wait to start receiving benefits, the higher your benefit will be. Whether delaying the start of your Social Security benefits is the best decision for you depends on your individual circumstances. The final consideration we would like our HP clients to make is that, in general, Social Security benefits are not subject to federal income tax if they are the only income received during the year. However, if you work during retirement or receive other taxable or tax-exempt income or interest, a portion of your benefit may become taxable. Publication 915 of the IRS contains a worksheet that can help you determine if any portion of your Social Security benefit is taxable.
IRAs
The longer you delay your retirement from HP, the longer you can continue to make contributions to your IRAs. If you have a traditional IRA, you are required to begin drawing RMDs once you reach age 7012 (or 72 if you reach age 7012 after 2019). The Internal Revenue Service will assess a 50% penalty on the amount that should have been distributed if you fail to accept the minimum distribution. As long as you do not own more than 5% of HP's retirement plan, the required minimum distribution rules do not apply until you reach age 70 1/2 (age 72 if you reach age 7012 after 2019) or retire from HP, whichever comes first. If you have a Roth IRA, you are never required to accept withdrawals.
Note: Required minimum distributions for defined contribution plans (other than Section 457 plans for nongovernmental tax-exempt organizations) and IRAs have generally been suspended for 2020.
Employer-Sponsored Pension Plans
If you continue to work for HP after your normal retirement date (or if you retire and then return to work for HP), and you participate in a traditional (defined benefit) pension plan, you must understand how your pension benefit will be affected by your delayed HP retirement.
Tip: If you retire, and go to work for a new employer, your pension benefit won't be impacted at all — you can work, receive a salary from your new employer, and also receive your pension benefit from your original employer.
In general, you will continue to accrue benefits during your delayed retirement from HP. Nonetheless, some pension plans limit the number of years that can be counted toward your pension. If you have reached this limit, continuing to work will typically not increase your pension benefit unless your plan calculates benefits based on your final average pay and your pay continues to rise.
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Caution: If your pension plan calculates benefits using final average pay, be sure to discuss with your plan administrator how your particular benefit might be affected if you decide to continue to work on a part-time basis. In some cases, reducing your hours at the end of your career could reduce your final average pay, resulting in a smaller benefit than you might otherwise have received. Also, note that some plans require that you work at least 1,000 hours in order to get credit for a year of service.
Some plans permit you to begin receiving your pension benefit at the normal retirement age, even if you are still employed. Other plans will suspend your pension benefits if you continue to work past your normal retirement date, but they will actuarially increase your payment when benefits are reinstated to account for the period of time benefits were suspended. Other plans will suspend your benefit if you work more than 40 hours per month and will not provide any actuarial increase; in effect, you will lose your benefit if you work more than 40 hours per month.
Some plans offer an additional option called 'phased retirement.' This type of program permits you to continue working part-time while accessing all or a portion of your pension. Federal law encourages phased retirement programs by permitting pension plans to begin paying benefits at age 62, even if you are still employed and have not yet attained the plan's normal retirement age.
401(K) and Other Employer-Sponsored Retirement Plans
If you continue to work beyond your plan's normal retirement age and participate in a 401(k), profit-sharing, ESOP, 403(b), 457(b), or similar plan sponsored by HP, you can continue to contribute to the plan and receive any applicable HP contribution.
Depending on the plan's terms, you may be able to access your funds while still employed by HP. Some plans permit distributions at age 59 12, at the normal retirement age, or in the event of financial hardship. Other plans require you to leave your employer before you can receive a distribution. If you believe you may need to access your funds while you're still employed, check with the administrator of your HP plan to learn about your plan's distribution options. Your distribution options will also be outlined in the summary plan description (SPD) of your plan.
If you continue to work past age 7012 (age 72 if you reach age 7012 after 2019), you will not be required to begin taking required minimum distributions (RMDs) from your plan until April 1 of the calendar year following the calendar year in which you retire (if the retirement plan permits this and you own less than 5% of the company).
Note: Required minimum distributions for defined contribution plans (other than Section 457 plans for nongovernmental tax-exempt organizations) and IRAs have generally been suspended for 2020.
Health Benefits
Many retirees continue to labor to maintain their medical coverage. If working during your HP retirement necessitates a shift from full-time to part-time employment, it is crucial that you comprehend how this decision will affect your medical benefits. Some employers, particularly those with phased retirement programs, provide health insurance to part-time workers.
Other employers, however, do not require a minimum number of hours worked in order to qualify for benefits. If your employer does not provide health insurance for part-time workers, you will need to find coverage elsewhere. If your spouse works and has available coverage, coverage under your spouse's health plan is the apparent option for married individuals. If not, COBRA coverage may be available.
COBRA is a federal law that enables you to continue receiving medical benefits under your employer's plan for a period of time, typically 18 months, following a qualifying event (such as a reduction in hours). However, we would like to remind our HP clients that this is an expensive option, as you must typically pay the full premium plus a 2% administrative fee. (COBRA is not applicable to employers with less than 20 employees.) Private health insurance is another option, but it is also likely to be expensive.
You may also seek for and acquire an individual health insurance policy via a state-based or federal health insurance Exchange Marketplace. Upon reaching age 65, you will be eligible for Medicare. Approximately three months before your 65th birthday, you should contact the Social Security Administration to discuss your options. Before enrolling in Medicare, if you have private or employer-sponsored health insurance, speak with your benefits administrator or insurance representative to determine how your current health insurance aligns with Medicare.
Conclusion
Retirement planning can be like a game of chess. Just like in chess, in retirement planning, it's important to think ahead, plan strategically, and make calculated moves to ensure a successful outcome. Retirement is not a one-size-fits-all game, and just like in chess, there are different strategies to approach it. Whether you are a HP worker looking to retire or an already existing retiree, the key is to make sure you have a strong plan in place that takes into account your unique circumstances, financial goals, and risk tolerance. Just like in chess, retirement planning requires patience, discipline, and a willingness to adapt to changing circumstances. But with the right approach, retirement can be a rewarding and fulfilling game that you can win.
How does HP Inc. ensure that the pension plan benefits will remain stable and secure for employees in the future, and what measures are being implemented to mitigate financial volatility associated with these benefits? Employees of HP Inc. should be particularly aware of how the transition of their pension payments to Prudential will affect their financial security and what protections are in place to ensure that these payments are maintained without disruption.
HP Inc. ensures pension plan benefits remain stable and secure by transferring the payment obligations to Prudential, a highly-rated insurance company selected through a careful review by an Independent Fiduciary. This move is aimed at reducing financial volatility associated with HP's pension obligations while maintaining the same benefit amount for retirees. Prudential's established financial stability provides additional security to employees(HP Inc_November 1 2021_…).
What specific details can HP Inc. employees expect to learn in the Welcome Kit from Prudential, and how will these details help them understand their new payment system? HP Inc. pension participants will need to familiarize themselves with the information outlined in the Welcome Kit to make informed decisions regarding their pension benefits going forward.
The Welcome Kit from Prudential will provide HP Inc. employees with instructions to set up an online account, along with details on managing payments, tax withholdings, and other resources. This information will allow employees to familiarize themselves with Prudential’s system and ensure a seamless transition without disruptions(HP Inc_November 1 2021_…).
In what ways does the selection process for Prudential as the insurance provider reflect the commitment of HP Inc. to the well-being of its employees? Understanding the rationale behind this decision will give HP Inc. employees insights into the fiduciary responsibilities and governance processes that protect their retirement benefits.
The selection of Prudential reflects HP Inc.'s commitment to employee well-being, as it involved the Independent Fiduciary conducting an extensive review of insurance providers. Prudential was chosen based on its financial strength and ability to manage pension payments securely, showing HP's focus on protecting retirement benefits(HP Inc_November 1 2021_…).
How will the annuity payments from Prudential differ from the previous pension payments in terms of tax implications and reporting for HP Inc. employees? It is crucial for employees of HP Inc. to comprehend the tax treatment of their new annuity payments to avoid any potential pitfalls in their personal financial planning.
The annuity payments from Prudential will be taxed similarly to the previous pension payments, though employees will receive two separate 1099-R forms for 2021 (one from Fidelity and one from Prudential). For future years, only a single form will be issued. This ensures employees are aware of how to manage tax reporting(HP Inc_November 1 2021_…).
What resources are available to HP Inc. employees seeking assistance regarding their pension benefits, and how can they effectively utilize these resources to address their concerns? Knowing how to access support and guidance will empower HP Inc. employees to manage their retirement benefits proactively.
HP Inc. employees seeking assistance can access live customer support through Fidelity or contact Prudential directly after the transition. Additionally, the Welcome Kit will include important contact information for managing their benefits, making it easy for employees to address concerns(HP Inc_November 1 2021_…).
How can HP Inc. employees verify the financial health and stability of Prudential, and why is this factor important in the context of their pension benefits? Employees must ask how Prudential's financial standing influences their view of long-term pension security and what metrics or ratings they should consider.
HP Inc. employees can verify Prudential’s financial health by reviewing Prudential's annual financial reports, which are publicly available. Prudential’s strong financial ratings were a key factor in its selection, assuring employees of long-term pension security(HP Inc_November 1 2021_…).
What steps should HP Inc. employees take to update their personal information, such as banking details and tax withholding preferences, following the transition to Prudential? Understanding these processes will ensure a smooth continuation of benefits for HP Inc. employees as they adapt to the new system.
Employees do not need to re-submit their personal information to Prudential, as HP will securely transfer all necessary data, including banking and tax withholding preferences. This ensures the continuation of pension payments without the need for employee intervention(HP Inc_November 1 2021_…).
How does HP Inc. plan to address potential changes in the financial landscape that may affect pension benefits, and what role does the insurance contract with Prudential play in this context? HP Inc. employees should be informed about the company's strategic outlook and how it aims to safeguard pension assets against economic uncertainties.
HP Inc. plans to address potential financial changes through its contract with Prudential, which guarantees pension payments will remain the same. Prudential manages these risks as part of its core business, providing added security against economic volatility(HP Inc_November 1 2021_…).
In what circumstances might HP Inc. employees see changes in their net pension payments following the transition to Prudential, despite assurances that payment amounts will remain unchanged? This understanding will help employees manage their expectations regarding future payments and any adjustments they may need to make.
Employees might see changes in their net pension payments due to tax adjustments or changes in withholding instructions, but the gross payment amount will remain unchanged. Any garnishments or other deductions will continue as before, ensuring consistency in payment structure(HP Inc_November 1 2021_…).
How can HP Inc. employees contact the company directly to learn more about the pension transition process, and what channels are available for them to have their questions addressed? Clear communication lines are essential for HP Inc. employees to ensure they receive timely and relevant information regarding their pension situations.
HP Inc. employees can contact the company through the Fidelity support line or directly through Prudential for any questions about the pension transition. The Welcome Kit and other resources will provide contact details, ensuring employees have access to timely support(HP Inc_November 1 2021_…).
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