New Retirement Contribution Limits for Phillips 66 employees in 2023

Healthcare Provider Update: Healthcare Provider for Phillips 66 Phillips 66 offers healthcare coverage through multiple providers, primarily Aetna and Blue Cross Blue Shield (BCBS), depending on the employee's home ZIP code. Employees also have access to a Kaiser HMO option if they live in designated areas of California or Washington. The medical plans include comprehensive coverage for various healthcare services, including preventive care, regular checkups, mental health, and substance use disorder treatments. Potential Healthcare Cost Increases in 2026 Healthcare costs for Phillips 66 employees can be expected to rise significantly in 2026, reflecting broader trends impacting the Affordable Care Act (ACA) marketplace. As major insurers are filing for rate increases that may exceed 60% in certain states, Phillips 66 employees could face steep hikes in out-of-pocket premiums, especially if federal subsidies are not extended. The combination of escalating medical costs and the potential loss of enhanced subsidies means many employees may see their premium costs increase substantially, leaving them with difficult choices regarding their healthcare coverage amidst these changing economic conditions. Click here to learn more

'The new 2023 retirement contribution limits present Phillips 66 employees with a good prospect to improve their financial position by making the most of tax-deferred investments because this practice helps them build up their retirement funds.' Consulting with Tyson Mavar , a representative of The Retirement Group, a division of Wealth Enhancement Group,  reveals that “

'T he 2023 contribution limits present Phillips 66 employees with a chance to improve their retirement savings so that they can enhance their financial security just before they retire.” Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement Group, says, 'The revised contribution limits in 2023 are a chance for Phillips 66 employees to increase their retirement contributions and, therefore, improve their financial security near the time of their retirement.'

In this article, we will discuss:

1. Some of these cost-of-living adjustments have risen to nearly historical levels due to persistently high inflation and financial instability in the recent past.

2. Keep in mind that this post is intended to provide information only and therefore you should talk to an accounting or tax advisor before modifying your 2023 tax plan.

3. You can also contact your financial advisor to see if he or she can offer information about the changes coming your way.

Last Update:

This blog post was updated to include further guidance on the new year's implications for Phillips 66 employees.

Individual Retirement Accounts (IRAs) Beginning in 2023, traditional IRAs for Phillips 66 workers will allow a maximum contribution of $6,500, which is $500 more than the previous year. The amount of catch-up contributions made by people over fifty remains at $1,000 which makes the total contribution limit $7,500. Individuals must withdraw funds from their Traditional IRA accounts no later than their 73rd birthday because withdrawals are taxed as ordinary income and withdrawals before age 59½ may attract a 10% federal income tax penalty.

Roth IRAs Due to the phase-out inco:me range increased by $9,000, Roth IRA contributions for Phillips 66 employees will phase out for single filers and heads of household between $138,000 and $153,000, and for married couples filing jointly up to $228,000. The phase-out range for married individuals filing separately stays at $0 – $10,000. For Phillips 66 employees to be eligible for tax-free and penalty-free withdrawals of earnings from Roth 401(k) distributions, the plans must have been held for at least five years and the participant must be age 59½ or older; other exceptions include the death of the plan owner.

Workplace Retirement Accounts The 2023 allowance for Phillips 66 employees who participate in 401(k), 403(b), 457 plans, and similar accounts will be $22,500, which is $2,000 more than the previous year. At age 50 participants can contribute an extra $7,500 so their contribution limit becomes $30,000. In most cases, you are obligated to begin taking minimum distributions from your 401(k) or other defined-contribution plans at age 73. Withdrawals are taxed as ordinary income and, if withdrawn prior to age 59½, may incur a 10% federal income tax penalty.

SIMPLE Accounts The limit on contributions to this incentive match plan for Phillips 66 employees will be $15,500 in 2023, after a $1,500 increase. The following are the reasons why you can’t withdraw money from your SIMPLE account: Just like a traditional IRA, you must start receiving your SIMPLE account distribution at age 73. Withdrawals are taxed as ordinary income and, if withdrawn prior to age 59½, may incur a 10% federal income tax penalty.

Important Note:

This post is meant to be informative only and therefore you should seek advice from a tax or accounting professional before you modify your 2018 tax plan.

Stripped Fact:

Here is some new information for employees of Phillips 66 companies in 2023: The annual limit on Health Savings Account (HSA) contributions has risen for the first time. The IRS has raised the HSA contribution limit for people with high-deductible health plans covering only themselves to $3,700 from $3,650 in the previous year. The HSA contribution limit for people with family coverage plans will now be $7,400 which is $100 more. Because of these higher contribution limits, Phillips 66 employees can save more in an HSA in order to fund future healthcare expenses and do so in a way that is taxed far less aggressively, which will serve as a big help in retirement. (Source: IRS.gov, Revenue Procedure 2022-48, November 2022)

Stripped Analogy:

Your retirement savings should be thought of as a perfectly calculated recipe that if properly followed will result in a happy and wealthy future. Just as a good chef will have to put more of this or that into the dish to make it taste better, retirement contributions for Phillips 66 employees also need to be optimized for the best financial result. The 2023 retirement contribution limits are the special ingredient that will make your retirement plan taste better. Just as salt adds flavor to food, then you will be able to put more money into your retirement accounts. Just as it helps to bring out the flavor of a dish, it will be to your benefit to contribute to your retirement accounts up to the new limits. So, use these limits as the key to your retirement recipe and through their help, make sure that you can enjoy your golden years to the fullest.

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Sources:

1. Internal Revenue Service.   'Retirement Topics - IRA Contribution Limits.'  IRS, July 2023,  https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits .

2. Internal Revenue Service.   'Publication 969 (2024), Health Savings Accounts and Other Tax-Favored Health Plans.'  IRS, January 2024,  https://www.irs.gov/publications/p969 .

3. Internal Revenue Service.   'Retirement Topics - 401(k) and Profit-Sharing Plan Contribution Limits.'  IRS, July 2023,  https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-401k-and-profit-sharing-plan-contribution-limits .

4. Fidelity Investments.   'HSA Contribution Limits 2024.'  Fidelity Investments, January 2024,  https://www.fidelity.com/learning-center/smart-money/hsa-contribution-limits .

5. Internal Revenue Service.   'Taxpayers Should Review the 401(k) and IRA Limit Increases for 2023.'  IRS, November 2022,  https://www.irs.gov/newsroom/taxpayers-should-review-the-401k-and-ira-limit-increases-for-2023 .