<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=314834185700910&amp;ev=PageView&amp;noscript=1">

New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Learn More

Navigating the Retirement Income Valley for Sherwin-Williams Employees

image-table

Healthcare Provider Update: Healthcare Provider for Sherwin-Williams Sherwin-Williams provides its employees with access to comprehensive healthcare benefits through employer-sponsored health plans, which include medical, dental, and vision coverage. These plans are designed to meet the diverse needs of their workforce and are typically updated annually during the open enrollment period each October and November. Potential Healthcare Cost Increases for Sherwin-Williams in 2026 As healthcare costs continue to rise, Sherwin-Williams may face significant increases in insurances premiums for 2026. Due to anticipated record hikes in Affordable Care Act (ACA) marketplace plans, some employees could see their healthcare expenses surge by over 75% if enhanced federal premium subsidies are not extended. This situation is compounded by rising medical costs, with overall healthcare costs expected to increase by approximately 8.5% for employers, meaning that Sherwin-Williams will likely need to navigate these challenges while managing employee healthcare benefits responsibly. As a proactive measure, employees might consider optimizing their healthcare choices in 2025 to mitigate potential financial impacts in the coming year. Click here to learn more

'Understanding the 'income valley' offers Sherwin-Williams employees a critical opportunity to strategically manage their tax burdens during retirement, and with the recent SECURE 2.0 Act changes, it's more important than ever to implement tax-efficient strategies well in advance of required minimum distributions.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Sherwin-Williams employees approaching retirement can significantly benefit from planning during the 'income valley,' utilizing tax-saving strategies and Roth conversions to lower their overall tax burden, especially with the SECURE 2.0 Act providing more flexibility before RMDs begin.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

  1. The concept of the 'income valley' and its significance for retirement planning.

  2. Tax-efficient strategies such as tax-saving withdrawals, Roth conversions, and charitable giving during the income valley.

  3. The impact of the SECURE 2.0 Act on retirement planning and RMDs.

When it comes to retirement planning, time is one of our most precious resources. Building a nest egg that can support a comfortable retirement requires effective use of time, particularly in the form of compound profits. Traditional and Roth retirement savings, taxable accounts, and Social Security income are frequently used to finance retirement. But for many people, retirement doesn't always begin at a specific age, and when to make key retirement-related decisions can significantly affect increasing retirement income and reducing taxes.

For Sherwin-Williams employees born in 1960 or later, the full retirement age for Social Security benefits is 67. However, recent legislative amendments have added additional factors to retirement planning. The required minimum distribution (RMD) age was raised from 72 to 73 by the SECURE 2.0 Act, which went into effect in 2023. This presents new opportunities for tax planning by allowing those who retire at age 67 to delay RMDs for an additional year.

Starting in 2033, the RMD age for individuals born in 1960 or later will rise to 75, providing more time to manage taxes before required withdrawals from tax-deferred retirement plans like 401(k)s and IRAs. Though this change is still years away, it will significantly affect how retirees manage their taxes and income in the years before RMDs.

For tax planning, understanding this time frame—known as the 'income valley'—can be quite beneficial. The period between retirement and the start of mandatory minimum distributions is called the 'income valley.' During this time, a retiree may find themselves in a lower tax bracket due to reduced taxable income. Depending on the retirement income sources and withdrawal strategy, this period can vary significantly.

Consider the situation of Sally and Carl, a Sherwin-Williams couple in their early 60s preparing for retirement. With a total pre-retirement income of $150,000, Sally and Carl plan to retire at age 67. They have $55,000 in available income, drawn from a mix of Social Security, their 401(k), and taxable assets, to cover their estimated $95,000 in yearly retirement needs. However, their taxable income may be much lower in the early years of retirement than later on, as they begin their retirement before the mandatory minimum distributions start.

The Income Valley's Mechanisms

In this example, Sally and Carl plan to use their $250,000 bank account and $1,000,000 401(k) to pay for their living expenses in the first few years of retirement. They can tap into their taxable accounts and take withdrawals from their checking accounts during this income valley period without incurring significant tax liabilities. Sally and Carl would be able to live on relatively low taxable income during this time since withdrawals from non-tax-deferred accounts, such as their bank or brokerage account, would not be counted as taxable income.

Since their Social Security payouts are taxed up to 85%, using non-taxable funds first can provide substantial tax relief before RMDs begin. This period also offers them a chance to figure out the most tax-efficient way to manage their 401(k) withdrawals. The scenario changes when they start taking withdrawals from their 401(k) at age 72, as they will be taxed as ordinary income, which may push them into a higher tax bracket.

Handling the Income Valley

For retirees, the income valley presents a unique opportunity to implement strategies that can lower overall tax burdens. Retirees like Sally and Carl might want to consider three tax solutions during the income valley years:

Tax-Saving Withdrawals

Making tax-efficient withdrawals is one of the best ways to manage taxes in retirement. This involves carefully selecting the source of the money used to cover living expenses based on tax treatment. For example, a retiree might withdraw from taxable assets first, followed by tax-deferred accounts like a 401(k), and finally, tax-free Roth accounts. This strategy organizes withdrawals in the most tax-efficient order.

Another tactic is proportional withdrawals, where money is withdrawn from each account based on their total amounts. This strategy helps reduce the chances of being pushed into a higher tax bracket later in retirement and maintains a more stable income stream. By carefully managing withdrawals from tax-deferred accounts, retirees can reduce lifetime taxes and future RMDs while in lower tax brackets.

However, this strategy's impact on Social Security taxes must be carefully considered. Withdrawals from tax-deferred accounts raise taxable income, which could result in higher taxes on Social Security benefits. Additionally, the retiree might be placed in a higher Medicare premium bracket due to increasing income. It is essential to consult with a tax professional before making any retirement planning decisions.

Roth Conversions

Converting tax-deferred retirement funds (like an IRA or 401(k)) into a Roth IRA is known as a Roth conversion. While Roth accounts grow tax-free and allow for tax-free withdrawals in retirement, retirees must pay taxes on the converted amount today. Conducting a Roth conversion during a period of low taxable income, such as the income valley, is especially advantageous.

Retirees can reduce the size of their tax-deferred accounts and, consequently, their RMDs (and related taxes) after they start by transferring a portion of their 401(k) funds into a Roth IRA during the income valley. Roth IRAs provide more control over retirement income in later years since they are not subject to RMDs.

However, like tax-efficient withdrawals, Roth conversions may temporarily increase taxable income, which could lead to higher Social Security taxes and higher Medicare premiums. Future tax implications should be carefully considered before deciding to convert funds into a Roth IRA, as the timing of the conversion can significantly impact its outcome.

Charitable Giving

Charitable donations can substantially lower taxable income during the income valley for retirees who are philanthropically inclined. By contributing to charities, retirees can support causes they care about while lowering their taxable income. Donations can dramatically reduce tax liabilities if the retiree itemizes deductions.

The Qualified Charitable Distribution (QCD) is particularly beneficial for retirees. A QCD allows individuals to donate up to $100,000 per year to a qualified charity directly from their IRA. The QCD is not included in taxable income but counts as a distribution for RMD purposes. This strategy allows retirees to meet their RMD requirement without increasing their taxable income. As of 2025, retirees may be able to lower their RMD levels and further reduce their tax burden by using QCDs.

QCDs are a simple method to give back while lowering taxable income because they don't need to be itemized, unlike traditional charity donations.

Considerations & Restrictions

While these strategies can be effective in reducing taxes during retirement, not all retirees will have the same flexibility in managing their retirement income. Some retirees may have limited options for withdrawing funds, particularly if they mostly rely on tax-deferred accounts like 401(k)s or IRAs. In such cases, the ability to strategically withdraw from taxable or tax-free funds may be limited, reducing their ability to lower taxable income.

Featured Video

Articles you may find interesting:

Loading...

Moreover, retirees with additional income sources—such as pensions, annuities, or rental income—may find their taxable income increases, making it more difficult to implement these tax-efficient strategies. While they may still be able to manage their withdrawals, they have little control over the taxation of their other income sources.

The SECURE 2.0 Act's delay of RMDs provides retirees more time to strategize their tax planning. It is crucial to consult with financial professionals to understand how these changes might impact individual situations.

In summary, the income valley offers retirees a valuable window to manage taxes before RMDs begin. By implementing strategies like tax-efficient withdrawals, Roth conversions, and charitable giving, retirees can reduce their tax burden, spread out tax payments, and preserve more of their hard-earned savings.

Sherwin-Williams employees should also consider healthcare expenses as they approach the income valley. According to a Fidelity Investments study, excluding long-term care, the average couple retiring at age 65 in 2023 will need approximately $315,000 for healthcare expenses during retirement. By planning for these needs during the income valley, when taxable income is lower, retirees can better manage their resources and avoid financial strain. Planning for healthcare is essential to long-term financial well-being.

Learn how to navigate the retirement income valley with smart withdrawal strategies and tax-saving solutions. Discover how you can lower your tax burden, enhance your retirement savings, and take advantage of the SECURE 2.0 Act's provisions to safeguard your financial future. By making informed choices today, you can plan for a more comfortable retirement.

Consider the retirement income valley as a calm stretch of a long journey. Just as a driver might ease off the pedal to conserve fuel on a flat, easy stretch of road, retirees can reduce taxes and preserve wealth during this period before RMDs begin.

Source:

1. 'What the Wealthy Get Right About Retirement Withdrawals.'   Investopedia , 2 May 2025,  www.investopedia.com/articles/retirement/101/wealthy-get-right-about-retirement-withdrawals . Accessed 4 May 2025.

2. 'Charitable Trusts vs. Private Foundations: What Is Right for You?'   Investopedia , 2 May 2025,  www.investopedia.com/articles/retirement/101/charitable-trusts-vs-private-foundations . Accessed 4 May 2025.

3. Foster, Lauren. 'The Market Is Swinging Wildly. Should Retirees Wait to Take RMDs?'   Barron's , 1 May 2025,  www.barrons.com/articles/market-swinging-wildly-rmds-should-retirees-wait . Accessed 4 May 2025.

4. 'Understanding the Retirement Income Valley.'   Fidelity Investments , 30 Apr. 2025,  www.fidelity.com/retirement-planning/retirement-income-valley . Accessed 4 May 2025.

5. 'SECURE 2.0 Act Changes RMD Rules.'   Ascensus , 25 Oct. 2023,  www.ascensus.com/news/secure-2-0-act-rmd-changes . Accessed 4 May 2025.

What is the Sherwin-Williams 401(k) plan?

The Sherwin-Williams 401(k) plan is a retirement savings plan that allows employees to save a portion of their salary on a pre-tax or after-tax basis for their future retirement.

How can I enroll in the Sherwin-Williams 401(k) plan?

Employees can enroll in the Sherwin-Williams 401(k) plan by accessing the company’s benefits portal or contacting the HR department for guidance on the enrollment process.

What is the employer match for the Sherwin-Williams 401(k) plan?

Sherwin-Williams offers a competitive employer match for contributions made to the 401(k) plan, typically matching a percentage of employee contributions up to a certain limit.

At what age can I start contributing to the Sherwin-Williams 401(k) plan?

Employees can start contributing to the Sherwin-Williams 401(k) plan as soon as they are eligible, which is generally after completing a certain period of service with the company.

Can I take a loan against my Sherwin-Williams 401(k) plan?

Yes, Sherwin-Williams allows employees to take loans against their 401(k) plan balance under certain conditions. Employees should review the plan’s specific loan provisions for details.

What investment options are available in the Sherwin-Williams 401(k) plan?

The Sherwin-Williams 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to help employees grow their retirement savings.

How often can I change my contribution amount to the Sherwin-Williams 401(k) plan?

Employees can change their contribution amount to the Sherwin-Williams 401(k) plan at designated times throughout the year, typically during open enrollment or after a qualifying life event.

Is there a vesting schedule for the Sherwin-Williams 401(k) employer match?

Yes, Sherwin-Williams has a vesting schedule for the employer match, meaning employees must work for the company for a certain period to fully own the matched contributions.

How can I check my Sherwin-Williams 401(k) balance?

Employees can check their Sherwin-Williams 401(k) balance by logging into the benefits portal or contacting the plan administrator for assistance.

What happens to my Sherwin-Williams 401(k) if I leave the company?

If you leave Sherwin-Williams, you have several options for your 401(k) balance, including rolling it over to an IRA or a new employer’s plan, cashing it out, or leaving it in the Sherwin-Williams plan if eligible.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Sherwin-Williams provides a defined contribution plan for its salaried employees, which includes a pension investment plan (PIP). This plan involves company contributions to an employee's account based on a percentage of their income, which increases with age and service. For union employees, there is a defined benefit pension plan based on years of service and specific contractual amounts. Both plans aim to provide stable retirement income for employees. Additionally, Sherwin-Williams offers a 401(k) plan with matching contributions to further support employee retirement savings.
Financial Performance and Layoffs: Sherwin-Williams reported modest sales growth of 0.5% for Q2 2024. The company is closing its Bedford Heights plant, resulting in 51 job cuts, as part of its efforts to streamline operations and reduce costs. Despite a softer macroeconomic environment, Sherwin-Williams is focusing on maintaining profitability and shareholder value through disciplined capital allocation and strategic market positioning (Sources: Sherwin-Williams, Cleveland.com).
Sherwin-Williams grants RSUs that vest over a period, providing shares upon vesting. Stock options are also available, allowing employees to purchase shares at a set price.
Sherwin-Williams has made significant updates to its employee healthcare benefits to align with the current economic, investment, tax, and political environment. In 2022, the company emphasized enhancing its occupational health and safety initiatives through the "S-W Cares" safety culture program. This program aims to reduce ergonomic injuries and workplace hazards by implementing comprehensive safety action plans and conducting monthly training sessions. These efforts reflect Sherwin-Williams' commitment to creating a safe and supportive work environment for its employees, which is crucial for maintaining productivity and morale. In 2023, Sherwin-Williams continued to build on these initiatives by launching a new data management system to improve reporting and oversight capabilities related to health and safety issues. This system includes dedicated learning and training modules designed to promote continuous improvement in workplace safety. Additionally, the company's sustainability framework highlights the integration of health and wellness programs into its overall strategy. By investing in comprehensive healthcare and safety benefits, Sherwin-Williams aims to attract and retain top talent, ensuring long-term business success and resilience amid economic uncertainties.
New call-to-action

Additional Articles

Check Out Articles for Sherwin-Williams employees

Loading...

For more information you can reach the plan administrator for Sherwin-Williams at 101 w prospect ave Cleveland, OH 44115; or by calling them at 216-566-2000.

https://www.sherwin-williams.com/documents/pension-plan-2022.pdf - Page 5, https://www.sherwin-williams.com/documents/pension-plan-2023.pdf - Page 12, https://www.sherwin-williams.com/documents/pension-plan-2024.pdf - Page 15, https://www.sherwin-williams.com/documents/401k-plan-2022.pdf - Page 8, https://www.sherwin-williams.com/documents/401k-plan-2023.pdf - Page 22, https://www.sherwin-williams.com/documents/401k-plan-2024.pdf - Page 28, https://www.sherwin-williams.com/documents/rsu-plan-2022.pdf - Page 20, https://www.sherwin-williams.com/documents/rsu-plan-2023.pdf - Page 14, https://www.sherwin-williams.com/documents/rsu-plan-2024.pdf - Page 17, https://www.sherwin-williams.com/documents/healthcare-plan-2022.pdf - Page 23

*Please see disclaimer for more information

Relevant Articles

Check Out Articles for Sherwin-Williams employees