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

American Airlines Group Employees: Smarter Ways to Manage Taxes on Appreciated Stock

Healthcare Provider Update: Healthcare Provider for American Airlines Group American Airlines Group primarily offers health insurance benefits through various large national insurers, including Aetna and UnitedHealthcare. This ensures coverage for their employees across a variety of healthcare needs. Potential Healthcare Cost Increases in 2026 Healthcare costs for American Airlines Group are poised to intensify in 2026, largely driven by record increases in Affordable Care Act (ACA) premiums. Insurers exhibit a strong trend of escalating rates, with anticipated hikes averaging around 18%, and in some regions, exceeding 60%. The looming expiration of enhanced federal premium subsidies is a significant factor, as it may push out-of-pocket premiums for many employees up by over 75%. Consequently, the financial strain of rising medical costs and decreased subsidy support could severely impact both employees' budgets and the employer's approach to providing competitive benefits. Click here to learn more

'American Airlines Group employees with concentrated stock positions may benefit from thoughtful tax planning that allows for tax deferral while balancing liquidity, compliance, and long-term compounding,' Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'American Airlines Group employees who hold highly-appreciated stock may want to consider tax-efficient strategies that help mitigate their liabilities while aligning with their overall retirement goals,' Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

How taxes can affect investment returns, particularly on concentrated stock positions.
Exchange funds and options-based strategies as methods for tax deferral and diversification.
Alternative planning techniques outside ETFs, including charitable trusts and gifting strategies.

By Carlos Hernandez, Wealth Enhancement advisor

When it comes to driving portfolio returns, many investors aim to keep management fees low by investing in low-cost index funds and exchange-traded funds (ETFs). While fees matter, however, the real culprit for lower-than-anticipated performance is taxes. ¹

Wealth Enhancement advisor Carlos Hernandez explains: 'By losing less to taxes each year, investors have access to more capital that can continue to compound over time. This makes tax deferral an important part of an effective financial plan.' American Airlines Group employees looking for long-term growth strategies could benefit by understanding how to better manage their investment tax burdens.

Trade Money

One area where taxes can take a toll is on the sale of company stock or other concentrated investment positions. American Airlines Group professionals looking to diversify could face significant capital gains taxes on an outright sale. One way to diversify without triggering immediate capital gains is through exchange funds. By contributing their highy-appreciated stock to a pooled fund, investors can trade their concentrated holdings for shares in a diverse basket of securities. This method can be used by American Airlines Group employees who want to diversify while postponing taxable events.

Although this method allows for tax deferral, it also requires investors to hold the exchange fund for a period of time, typically seven years. ² This could create a challenge for investors who require liquidity. Additionally, these funds are often exclusively accessible to wealthy, accredited investors—something American Airlines Group executives should carefully evaluate.

Funds Based on Options

Another way to mitigate taxes on the sale of highly-appreciated stock is by using options contracts. The idea is to hedge risk with put options while covering the cost of those puts by selling call options—a strategy called 'collaring'. From there, the strategy reverses, with investors selling put options and using the proceeds to buy call option on an equity or bond index. ³ If managed effectively, this helps to diversify a concentrated portfolio while still maintaining liquidity.

Given the complexity of this strategy, meticulous planning is necessary. It's generally recommended that investors work with an experienced financial advisor before pursuing this approach.

Things to Be Aware of

Although these strategies can be beneficial for American Airlines Group employees who hold highly-appreciated stock, caution is recommended. There are costs associated with these approaches, and potential liquidity risks. Additionally, the IRS may eventually contest such arrangements because their tax status has not been thoroughly examined—something American Airlines Group retirees should keep top of mind.

'Tax drag reduction strategies can be effective, but they must be assessed through the lens of risk, liquidity, cost, and compliance,' warns Carlos Hernandez. What is appealing in theory must hold up to inspection in the real world.

Alternative Strategies

Although they show promise, investors with highly-appreciated stock or those looking to postpone gains have other alternatives besides exchange funds or options. Other tactics could include:

- Prepaid variable forwards (subject to IRS regulations, contracts to sell at predetermined terms in the future).
- Charitable remainder trusts (CRTs), which allow investors to donate appreciated stock to a charitable trust and receive a stream of regular income in return.
- Donor-advised funds (DAFs), which provide investors with a tax deduction for the fair market value of the appreciated stock they donate.
- Other gifting techniques, such as direct donations to charity or family.
Each has its own set of guidelines, advantages, and disadvantages. To limit unnecessary taxes or violating the constructive sale regulations, careful planning is necessary for American Airlines Group professionals managing complex portfolios.

The Bottom Line

Although the movement to mitigate the tax burden on investments is not new, the instruments are changing. Both exchange funds and options-based structures offer investors a way to manage tax liabilities, especially for American Airlines Group employees who hold highly-appreciated stock.

Featured Video

Articles you may find interesting:

In the end, taxes are unavoidable. However, with the correct set of instruments, they can be controlled and postponed. 'The real value comes from aligning tax strategy with investment strategy,' summarizes Carlos Hernandez.

Sources:

1. BlackRock Advisor Center. ' Investing for After-Tax Returns ,' 2025.

2. Kiplinger. ' Four Clever and Tax-Efficient Ways to Ditch Concentrated Stock Holdings ,' by Robert Waskiewicz. Sep. 11, 2025.

3. Financial Planning Association. ' Tax-Efficient Ways to Diversify Concentrated Stock Positions ,' by Peter Lazaroff. Oct. 2024.

What is the 401(k) plan offered by American Airlines Group?

The 401(k) plan offered by American Airlines Group is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.

How can I enroll in the 401(k) plan at American Airlines Group?

You can enroll in the 401(k) plan at American Airlines Group by accessing the employee benefits portal and following the enrollment instructions provided.

Does American Airlines Group offer matching contributions to the 401(k) plan?

Yes, American Airlines Group offers matching contributions to the 401(k) plan, helping employees maximize their retirement savings.

What is the vesting schedule for the 401(k) matching contributions at American Airlines Group?

The vesting schedule for matching contributions at American Airlines Group typically follows a graded vesting schedule, which means you gain ownership of the employer contributions over a period of time.

Can I change my contribution percentage to the 401(k) plan at American Airlines Group?

Yes, you can change your contribution percentage to the 401(k) plan at American Airlines Group at any time through the employee benefits portal.

What investment options are available in the American Airlines Group 401(k) plan?

The American Airlines Group 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles to suit different risk tolerances.

Is there a loan option available through the 401(k) plan at American Airlines Group?

Yes, American Airlines Group allows employees to take loans against their 401(k) savings, subject to certain terms and conditions.

What happens to my 401(k) plan if I leave American Airlines Group?

If you leave American Airlines Group, you can choose to roll over your 401(k) balance to another retirement account, cash it out, or leave it in the plan if allowed.

At what age can I start withdrawing from my 401(k) plan at American Airlines Group without penalties?

You can start withdrawing from your 401(k) plan at American Airlines Group without penalties at age 59½, provided you meet other plan requirements.

Does American Airlines Group offer financial education resources for employees regarding their 401(k) plan?

Yes, American Airlines Group provides financial education resources, including workshops and online tools, to help employees understand their 401(k) plan options.

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

American Airlines offers both a defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan includes a cash balance component, where benefits grow based on years of service and compensation, with interest credits added annually. The 401(k) plan features company matching contributions and various investment options such as target-date funds and mutual funds. American Airlines also provides financial planning resources and tools to help employees manage their retirement savings.

American Airlines offers a 401(k) plan with up to a 5.5% employer match and comprehensive healthcare benefits. The company announced the layoff of 656 employees in its customer support department as part of a reorganization.

American Airlines offers RSUs that vest over time, giving employees shares of the company. They also provide stock options, allowing employees to purchase shares at a fixed price.

Additional Articles

Check Out Articles for American Airlines Group employees

For more information you can reach the plan administrator for American Airlines Group at 1 Skyview Drive Fort Worth, TX 76155; or by calling them at (817) 963-1234.