New Update: Rising Oil Costs are Affecting Retirement Plans. Will you be impacted?
RMD Roundup: A Few Key Updates About Required Minimum Distributions For Farmers Insurance Group Employees
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Oil prices between $50 and $120 per barrel with 80% annualized volatility have created ripple effects throughout the economy over the past six months. Energy price swings affect insurer investment portfolios and the broader economic conditions that drive policy demand and claims patterns. For Farmers Insurance Group employees focused on long-term financial health, periods of oil-driven economic volatility reinforce the value of diversified strategies that account for how energy markets influence the broader investment landscape. In this environment, a financial advisor can help you assess your exposure to oil-driven economic effects and build appropriately diversified strategies.
As we approach the end of 2026, now might be a good time for Farmers Insurance Group employees to take a closer look at a few developments surrounding required minimum distributions (RMDs) for corporate employees in the United States.
What Are RMDs?
We'd first like to ensure that our Farmers Insurance Group clients understand the basics— What are RMDs? Once you reach age 72, you are required to take minimum distributions from your traditional IRAs and most employer-sponsored retirement plans. (RMDs are not required from an employer plan if you are still working at the company sponsoring the plan and you do not own more than 5% of the company.) You can always take more than the required amount if you choose.
The portion of an RMD representing earnings and tax-deductible contributions is taxed as ordinary income, unless the RMD is a qualified distribution from a Roth account. We'd like our clients from Farmers Insurance Group to note that failing to take the full amount of an RMD could result in a penalty tax of 50% of the difference.
Generally, RMDs must be taken by December 31 each year. You can delay your first RMD until April 1 following the year in which you reach RMD age; however, it's important that these Farmers Insurance Group employees be aware that you will then need to take two RMDs in one year — the first by April 1 and the second by December 31. (If you reached age 73 in the first half of 2026, different rules apply; see below.)
You may want to weigh the decision to delay your first RMD carefully. Taking two distributions in one year might bump you into a higher income tax bracket for that year.
New RMD Age and a 2026 Waiver Add Complexity
However, there was a post-pandemic era-related rule change in 2020 that might have affected some retirement savers who reached age 70½ in 2026. To help individuals manage financial challenges brought on by the post-pandemic era, RMDs were waived in 2020, including any postponed from 2019. In other words, some taxpayers could have benefitted from waiving both their 2026 and 2026 RMDs.
Any of our clients from Farmers Insurance Group who took advantage of the 2026 waiver should note that RMDs resumed in 2026 (and continue in 2026) and need to be taken by December 31. The option to delay to April 1, 2026, applies only to first RMDs for those who reached age 72 on or after July 1, 2026.
New Life Expectancy Tables
Recognizing that life expectancies have increased, the IRS has issued new tables designed to help investors stretch their retirement savings over a longer period of time. Investors may be pleased to learn that calculations will typically result in lower annual RMD amounts and potentially lower income tax obligations as a result.
For any Farmers Insurance Group employees who would like more information on RMDs, consider speaking with your financial and tax professionals.
Before finalizing any estate plan, it is worth examining how Farmers Insurance Group's employer-sponsored benefits fit into the broader picture. According to publicly available information, Farmers Insurance Group maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. Farmers Insurance Group does not appear to offer a formal retiree healthcare program, making healthcare coverage planning an important consideration if you retire before age 65. Because the specifics of your pension formula, vesting schedule, and benefit eligibility depend on your individual employment history and plan documents, We encourage you to review your Summary Plan Description (SPD) or speak with Farmers Insurance Group's HR or benefits team for the most current details.
What is the 401(k) plan offered by Farmers Insurance Group?
The 401(k) plan at Farmers Insurance Group is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How does Farmers Insurance Group match employee contributions to the 401(k) plan?
Farmers Insurance Group offers a matching contribution to the 401(k) plan, which typically matches a percentage of the employee's contributions, up to a certain limit.
What are the eligibility requirements for the 401(k) plan at Farmers Insurance Group?
Employees of Farmers Insurance Group are generally eligible to participate in the 401(k) plan after completing a certain period of employment, usually within the first year.
Can employees of Farmers Insurance Group make changes to their 401(k) contributions?
Yes, employees of Farmers Insurance Group can change their contribution amounts at any time, subject to certain plan rules.
What investment options are available in the Farmers Insurance Group 401(k) plan?
The Farmers Insurance Group 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to tailor their investment strategy.
Is there a vesting schedule for the employer match in the Farmers Insurance Group 401(k) plan?
Yes, the Farmers Insurance Group 401(k) plan has a vesting schedule that determines how much of the employer match employees can keep if they leave the company.
How can employees at Farmers Insurance Group access their 401(k) account information?
Employees can access their 401(k) account information through the Farmers Insurance Group employee portal or by contacting the plan administrator.
What happens to the 401(k) savings if an employee leaves Farmers Insurance Group?
If an employee leaves Farmers Insurance Group, they can roll over their 401(k) savings into another retirement account, withdraw the funds, or leave the savings in the Farmers Insurance Group plan if allowed.
Can employees of Farmers Insurance Group take loans against their 401(k) savings?
Yes, the Farmers Insurance Group 401(k) plan may allow employees to take loans against their savings, subject to specific terms and conditions.
Are there penalties for withdrawing funds from the Farmers Insurance Group 401(k) plan before retirement age?
Yes, early withdrawals from the Farmers Insurance Group 401(k) plan may incur penalties and taxes unless certain exceptions apply.
For more information you can reach the plan administrator for Farmers Insurance Group at p.o. box 4363 Woodland Hills, CA 91365-4363; or by calling them at 800-451-0797.
https://www.farmers.com/documents/pension-plan-2022.pdf - Page 5, https://www.farmers.com/documents/pension-plan-2023.pdf - Page 12, https://www.farmers.com/documents/pension-plan-2024.pdf - Page 15, https://www.farmers.com/documents/401k-plan-2022.pdf - Page 8, https://www.farmers.com/documents/401k-plan-2023.pdf - Page 22, https://www.farmers.com/documents/401k-plan-2024.pdf - Page 28, https://www.farmers.com/documents/rsu-plan-2022.pdf - Page 20, https://www.farmers.com/documents/rsu-plan-2023.pdf - Page 14, https://www.farmers.com/documents/rsu-plan-2024.pdf - Page 17, https://www.farmers.com/documents/healthcare-plan-2022.pdf - Page 23
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