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Are Ghost Taxes Creeping Into Your FMC Retirement Plan?

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'Many FMC employees underestimate how much “ghost taxes” can erode retirement income. Understanding these hidden thresholds today can help you make more thoughtful decisions for tomorrow’s financial well-being,' — Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.

'Many FMC employees are surprised by how quickly hidden taxes like AMT, NIIT, and IRMAA can reduce retirement income, making it important for retirees to stay informed and thoughtfully plan so these costs don’t catch them off guard.' — Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

The five “ghost taxes” that may unexpectedly impact retirement income.
How these taxes can affect FMC employees and retirees.
Strategies to better understand and prepare for these tax implications.

How FMC Employees Can Prepare for the Five “Ghost Taxes” That Could Haunt Retirement

There are several lesser-known surcharges and thresholds that may unexpectedly increase your tax bill in retirement, even if you already understand federal, state, and local tax obligations. These include the Alternative Minimum Tax (AMT), the Net Investment Income Tax (NIIT), the Medicare Income-Related Monthly Adjustment Amount (IRMAA), the Social Security “tax torpedo,” and the new senior deduction. Because many of these thresholds are not adjusted for inflation, they increasingly impact retirees, including those from FMC.

1. AMT: Alternative Minimum Tax

The AMT is a parallel tax system designed to make sure higher-income individuals pay at least a minimum amount of taxes. It has its own tax brackets, forms, and rules, with a top rate of 28%. ¹ Some deductions available under the traditional tax system are limited under AMT rules.

For 2025, the AMT exemptions are:

- $88,100 for single filers (phasing out at $626,350)
- $137,000 for married couples filing jointly (phasing out at $1,252,700)

High income, exercising incentive stock options, large capital gains, or numerous itemized deductions may trigger AMT. Even though long-term capital gains receive preferential tax treatment, they can still reduce your AMT exemption. If AMT is paid in one year, a tax credit may be available in future years when AMT is not owed.

2. NIIT: Net Investment Income Tax

The NIIT applies a 3.8% tax on net investment income when modified adjusted gross income (MAGI) exceeds:

- $200,000 for single filers
- $250,000 for married couples filing jointly ²

This tax applies to dividends, interest, rental income, gains from home sales, and capital gains beyond exclusion limits. Withdrawals from 401(k)s and traditional IRAs are not directly taxed by NIIT, but they may increase MAGI and cause other investment income to be taxed.

Strategies to limit exposure include contributing to traditional retirement accounts, using health savings accounts (HSAs), and tax-loss harvesting. For instance, tax-loss harvesting allows you to use up to $3,000 in capital losses annually to offset ordinary income. ³

For individuals age 70½ or older looking to reduce MAGI, qualified charitable distributions (QCDs) may help. QCDs allow you to donate to qualified charities on a tax-free basis directly from your IRA, satisfying required minimum distribution (RMD) rules without bringing distributions into income. In 2025, up to $108,000 may be donated tax-free. ⁴

3. IRMAA: Income-Related Monthly Adjustment Amount

IRMAA adds a surcharge to Medicare Parts B and D premiums for higher-income retirees and is based on MAGI from two years prior.

For 2025, IRMAA applies when MAGI exceeds:

- $106,000 for single filers
- $212,000 for married couples filing jointly

Even a small increase above these limits can place retirees in a higher premium bracket. Tax-exempt interest from municipal bonds is included in MAGI for IRMAA purposes. Premiums and IRMAA can be deducted from Social Security payments or paid directly. Social Security allows individuals experiencing major life changes, such as retirement or death of a spouse, to request revised IRMAA calculations.

4. The Social Security “Tax Torpedo”

Social Security benefits may be taxable depending on “provisional income,” which includes:

- Adjusted gross income
- Non-taxable interest
- One-half of Social Security benefits

If provisional income exceeds:

- $34,000 for single filers
- $44,000 for married couples filing jointly

...then up to 85% of Social Security benefits may be taxable. ⁵

Delaying Social Security up to age 70 increases benefits by 8% per year beyond full retirement age.

5. The 2025–2028 New Senior Deduction

From 2025 to 2028, individuals age 65 and older may qualify for a new senior deduction:

- $6,000 for single filers
- $12,000 for married couples filing jointly

This deduction phases out at:

- $75,000 MAGI for single filers
- $150,000 MAGI for joint filers

This is separate from the standard senior deduction, which currently adds $2,000 for individuals or $3,200 for married couples age 65 or older.

Need Help Navigating These Taxes?

Understanding how AMT, NIIT, IRMAA, Social Security rules, and senior deductions affect retirement income can be complex, especially for FMC retirees managing pensions, 401(k)s, and other investments. The Retirement Group can help you better understand how these tax considerations relate to your retirement planning. Call (800) 900-5867 for guidance.

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Articles you may find interesting:

Sources:

1. Tax Foundation. “ 2026 Tax Brackets .” 9 Oct. 2025.

2. Gravelle, Jane G., and Don J. Marples. The 3.8% Net Investment Income Tax: Overview, Data, and Policy Options . Congressional Research Service, 30 June 2023, crsreports.congress.gov/product/pdf/R/R41413.

3. IRS. ' Topic no. 409, Capital gains and losses .' 12 Sep. 2025.

4. Wealth Enhancement. ' 7 Tax Moves to Consider Before The End of The Year ,' by Mary Taliaferro, CFP. Nov. 5, 2025.

5. Investopedia. ' Provisional Taxes: What They Are and How They Work ,' by Julia Kagan. 4 Sep. 2025.

How does FMC Technologies plan to manage the investment strategy of its pension plan to ensure it remains solvent and able to meet the benefit payments as employees retire? Given the shifting dynamics of the market, what specific measures is FMC Technologies employing to enhance the liquidity of its assets and mitigate risks associated with underfunding in the current economic climate?

Investment Strategy for Solvency and Benefit Payments: FMC Technologies' pension plan aims to ensure all benefit payments are met as they fall due. The investment strategy includes maintaining funds above the Statutory Funding Objective and transitioning towards lower-risk assets such as Liability Driven Investments (LDI), gilts, and cash. This strategy, driven by advice from LCP, seeks to reduce underfunding risks and ensure liquidity(FMC_Technologies_Pensio…).

In what ways does FMC Technologies incorporate environmental, social, and governance (ESG) factors into its investment decision-making for the pension plan? How does the commitment to ESG investing align with the broader goals of FMC Technologies, and what impact does it have on the long-term sustainability and performance of the company's pension investments?

ESG Factors in Investment Decisions: ESG factors, including climate change, are considered by FMC Technologies in investment decisions. The company encourages investment managers to integrate ESG considerations into their analysis of future performance and risks. ESG aligns with the long-term sustainability of the pension plan, though there are limited opportunities to apply ESG in the current target investment strategy of LDI, gilts, and cash(FMC_Technologies_Pensio…).

Can you elaborate on the additional voluntary contribution (AVC) arrangements available through FMC Technologies and how they are designed to support employees in building a more robust retirement income? What choices do employees have within these AVC options, and how can they tailor their investment to suit their individual risk profiles?

Additional Voluntary Contributions (AVC): FMC Technologies provides AVC arrangements designed to offer a range of investment options to help employees build a more robust retirement income. These options allow employees to tailor investments based on their risk-return preferences, ensuring flexibility in achieving personal retirement goals(FMC_Technologies_Pensio…).

As employees of FMC Technologies approach retirement, what processes are in place to evaluate their pension benefits and determine eligibility for various retirement options? What role does the pension plan's advisory team play in assisting employees with financial planning in preparation for retirement?

Pension Benefits Evaluation Process: FMC Technologies uses a structured process to evaluate pension benefits, supported by investment advisers and trustees. This process involves regularly reviewing the funding level and the benefit cash flows to ensure the pension plan is on track to meet employee retirement needs. Advisory teams help employees with financial planning during the transition to retirement(FMC_Technologies_Pensio…).

What steps is FMC Technologies taking to transition its investment strategy towards greater exposure to low-risk instruments while still aiming for satisfactory returns? How does this transition align with the companyâ€™s funding objectives, and what are the anticipated benefits for the employees in the context of their retirement planning?

Transition to Low-Risk Investments: FMC Technologies has transitioned much of its pension assets into LDI, gilts, and cash to de-risk the investment portfolio. This shift aligns with the company's funding objectives to secure pension liabilities and provide stable returns for retirees. The plan is expected to fully transition to these low-risk instruments to support long-term pension solvency(FMC_Technologies_Pensio…).

How does FMC Technologies measure the performance of its investment managers, and what criteria are used to evaluate their effectiveness in managing the pension plan's assets? In the event that an investment manager does not perform according to expectations, what procedures are in place for FMC Technologies to reassess and possibly reallocate those funds?

Investment Manager Performance: FMC Technologies evaluates the performance of its investment managers using various criteria, including their ability to meet long-term pension objectives. If an investment manager underperforms, FMC Technologies, with advice from LCP, reassesses and rebalances the portfolio as needed to ensure pension assets are properly managed(FMC_Technologies_Pensio…).

What communication channels does FMC Technologies recommend employees use if they have questions or need clarification regarding their retirement benefits and the pension plan? How can employees easily access additional resources or support to better understand their retirement options as they transition out of active employment?

Communication Channels for Retirement Benefits: Employees of FMC Technologies can access information and support regarding their pension and retirement benefits through direct communication with trustees and the pension advisory team. FMC Technologies recommends utilizing these resources for clarity on retirement options and to understand the transition out of active employment(FMC_Technologies_Pensio…).

Considering the implications of portfolio diversification, how does FMC Technologies determine the appropriate asset allocation for its pension plan's investment strategy? What considerations are taken into account to ensure that all employeesâ€™ retirement savings are managed in a way that balances risk and growth potential?

Asset Allocation and Portfolio Diversification: FMC Technologies’ pension plan employs a diversified asset allocation strategy, ensuring a balance between growth and risk. The investment strategy considers the need to match liabilities with assets while progressively reducing exposure to high-risk assets like equities and increasing exposure to low-risk instruments like LDI and gilts(FMC_Technologies_Pensio…).

How does FMC Technologies plan to maintain compliance with regulatory requirements regarding its pension plan, particularly concerning employer-related investments? What are the limitations or restrictions imposed by legislation that affect how FMC Technologies can manage its pension fund assets?

Compliance with Regulatory Requirements: FMC Technologies remains compliant with regulations regarding employer-related investments. Restrictions under the Pensions Act 1995 and the Occupational Pension Schemes (Investment) Regulations 2005 prevent significant investments in TechnipFMC or associated companies to avoid conflicts of interest(FMC_Technologies_Pensio…).

As risks associated with market fluctuations continue to evolve, how does FMC Technologies plan to adjust its investment strategy to mitigate these risks? What safeguards are put in place to protect retirement benefits during periods of economic uncertainty, and how will these strategies affect the financial well-being of FMC Technologiesâ€™ retirees?

Adjusting Investment Strategy for Market Risks: FMC Technologies employs a liability-driven approach to manage the pension fund, mitigating market risks associated with economic fluctuations. Regular reviews of the investment strategy, alongside professional advice, allow the company to adjust and protect the pension plan's assets during uncertain market conditions(FMC_Technologies_Pensio…).

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Pension Plan (Defined Benefit Plan): FMC Corporation has a pension plan known as the "FMC Corporation Employees' Retirement Program." This plan is a traditional defined benefit plan, which provides retirement, death, and disability benefits to eligible employees. The plan's benefits are determined based on years of service and final average pay, which is a common formula used to calculate pension payouts. The plan is primarily available to employees who were hired before July 1, 2007. After that date, new hires were no longer eligible for the defined benefit plan but were instead enrolled in the defined contribution plan. 401(k) Plan: The FMC Corporation Savings and Investment Plan is the company’s 401(k) offering. For employees hired after July 1, 2007, this plan serves as their primary retirement vehicle. FMC contributes a percentage of eligible pay to the plan annually. One of the notable features of this plan is the immediate vesting on all contributions, including the company match. This means that employees have full ownership of all contributions from the outset. The plan offers a wide range of investment options managed by Fidelity Investments.

Restructuring Efforts: FMC Corporation has been actively restructuring its operations to improve efficiency and profitability. The company expects to achieve $50 million to $75 million in adjusted EBITDA contributions from restructuring actions in 2024, with a run-rate savings target of approximately $150 million by the end of 2025. This restructuring is critical for FMC as it navigates through the challenges posed by the global economic environment, including supply chain disruptions and inflationary pressures. Pension and 401(k) Plans: FMC's financial outlook includes maintaining strong adjusted EBITDA and adjusted earnings per share growth, which are key metrics that can influence the stability and benefits of its pension and 401(k) plans. As FMC continues its restructuring and cost-saving measures, these benefits could see adjustments to align with the company’s long-term financial goals.

Stock Options: FMC offers Non-Qualified Stock Options (NSOs), which allow employees to purchase company shares at a predetermined strike price after a specific vesting period. These options align employee incentives with the company's financial performance, as they offer the potential for profit if the company's stock price increases. However, employees must be aware of the risks associated with stock options, including potential forfeiture if they leave the company before the options vest. RSUs: FMC also provides RSUs, which grant employees the right to receive company shares once certain vesting conditions are met. RSUs do not require employees to purchase the shares upfront, making them less risky than stock options. Once vested, the shares are delivered to the employees, and they may choose to sell them, subject to capital gains tax.

In 2023 and 2024, FMC Corporation maintained its commitment to employee health and well-being by continuing to enhance its health benefits offerings. This included expanding mental health resources and increasing flexibility in healthcare spending accounts. Despite economic challenges, FMC has focused on providing robust support for its employees, including coverage for telemedicine services and wellness incentives to promote a healthier workforce.

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For more information you can reach the plan administrator for FMC at , ; or by calling them at .

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