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Healthcare Provider Update: Healthcare Provider for Exelon Exelon does not operate as a healthcare provider; rather, it is a major energy company known for its utility services. However, it is associated with Exelon (the medication), which is a treatment for Alzheimer's and Parkinson's diseases, marketed by Knight Therapeutics in Latin America and licensed from Novartis. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs are projected to surge significantly, with the potential for national average increases in premium rates reaching around 15%, making it the most substantial hike in years. This rise is fueled by escalating medical expenses, the expiration of enhanced federal premium subsidies, and hefty rate requests from major insurers. For many consumers, this may translate to over a 75% increase in out-of-pocket expenses, as more than 22 million individuals could be affected by the loss of subsidies that currently ease their premium burdens. As a result, it is crucial for consumers to prepare strategically in 2025 to mitigate these rising costs. Click here to learn more
For Exelon employees wanting to make the most of their retirement savings, using strategies like Net Unrealized Appreciation (NUA) can deliver big tax benefits - 'you get long-term capital gains rates on appreciated employer stock instead of ordinary income tax rates - and it's a strategy you should discuss with your advisor - Tyson Mavar of the Retirement Group.'
I often tell Exelon employees that if NUA lowers tax liabilities on appreciated employer stock, they should talk to an expert like Paul Bergeron of The Retirement Group, 'he said.
In this article, we will discuss:
1. The tax treatment of qualified versus non-qualified accounts.
2. What Net Unrealized Appreciation (NUA) is for eligible employees.
3. Potential tax savings for Exelon employees with the NUA strategy.
We want to help our Exelon clients understand how NUA can be used by first making clear the tax treatment differences between qualified and nonqualified accounts. Those qualified accounts (traditional 401(k)s) exist to provide tax advantages. Contributing pre-tax dollars from your income to a qualified account lowers your tax for the year.
The qualified accounts are like a Traditional 401(k) but with tax advantages added.
And appreciation is not taxed until withdrawals are made. Upon withdrawal (tax penalty for withdrawals before age 59½ and required minimum distributions [RMDs] after age 70½), appreciation and invested amounts are taxed as ordinary income at the time of withdrawal (tax penalty for withdrawals before age 59½ and RMDs after age 70½).
In contrast, we remind our Exelon customers that non-qualified plans (like a standard brokerage account) are not encumbered by tax-deferral benefits. Investments are funded with after-tax money. In the event appreciated shares are liquidated for a gain, any excess of the difference between cost basis (original purchase price) and sales price is taxed at either the short-term or long-term capital gains rate, plus tax on dividends paid in the same year. The funds in non-qualified accounts are not subject to early withdrawal penalties nor required minimum distributions.
Read our e-book here for more: https://retirekit.theretirementgroup.com/net-unrealized-appreciation-ebook-offer
Added Fact:
Exelon employees holding employer stock in their qualified retirement plans could qualify for a special tax strategy called Net Unrealized Appreciation (NUA). NUA may allow eligible people to receive tax treatment favorable to them on the appreciation of their employer stock distributed from a qualified plan. Utilizing NUA may mean paying higher long-term capital gains tax rates on the stock appreciation than ordinary income tax rates. This can mean big tax savings if the stock has appreciated strongly over the years. Seek advice from a financial advisor or tax professional about eligibility and benefits of the NUA strategy. (Source: IRS.gov, 'Retirement Topics – Net Unrealized Appreciation (NUA),' updated October 15, 2021).
Added Analogy:
Imagine you have been building up a rare antique over years. Your retirement plan as a Exelon employee is sort of like this antique collection. Like the antique, your retirement plan may contain employer stock that has appreciated over time. Imagine now that you have a special tax strategy available to you - Net Unrealized Appreciation (NUA). Finding NUA is like entering a room of hidden tax benefits. You could get tax advantages on the appreciated value of your employer stock through NUA. It's like getting a key that lets you pay long-term capital gains tax rates on the appreciation instead of higher ordinary income tax rates. Exploring NUA as a strategy may be an added benefit to your retirement plan - helping you to protect and grow your money. Just as collectors consider how to protect and leverage their antiques, Exelon employees should consider NUA to optimize retirement savings.
Sources:
2. SmartAsset. 'Differences of Qualified vs. Nonqualified Retirement Plans.' SmartAsset , May 2024, www.smartasset.com/retirement/qualified-vs-nonqualified-retirement-plans?utm_source=chatgpt.com .
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3. Endeavor Wealth Advisors. 'Net Unrealized Appreciation 'NUA' Tax Strategies in Retirement.' Endeavor Wealth Advisors , October 2024, www.endeavorwa.com/nua-tax-strategies-in-retirement/?utm_source=chatgpt.com .
4. Thrivent. 'Tax-qualified Retirement Plans vs. Non-tax-qualified.' Thrivent , August 2024, www.thrivent.com/insights/retirement-planning/what-are-the-differences-in-tax-qualified-retirement-plans-and-non-tax-qualified-retirement-plans?utm_source=chatgpt.com .
5. Kiplinger. 'How Net Unrealized Appreciation Helps Save More of Your Retirement Savings.' Kiplinger , September 2024, www.kiplinger.com/taxes/how-net-unrealized-appreciation-helps-save-more-of-your-retirement-savings?utm_source=chatgpt.com .
How does Exelon's separation process into RemainCo and SpinCo impact the retirement benefits for employees in both segments, and what should employees at Exelon consider regarding their retirement planning in light of this structural change?
Exelon’s Separation into RemainCo and SpinCo: The separation into RemainCo and SpinCo may result in different benefits structures for employees, with RemainCo focusing on regulated utilities and SpinCo on competitive energy generation. Employees should evaluate how their specific retirement benefits, such as pensions and 401(k) plans, may change or be restructured under the new entities. Employees need to consider the impact of this change on their long-term retirement planning, especially with regard to how the corporate shift may affect contributions, vesting, and retirement payouts.
In what ways can Exelon employees leverage the Employee Savings Plan to maximize their retirement savings, and what specific features of the plan should employees be aware of to ensure they are making the most of their contributions?
Maximizing Retirement Savings through the Employee Savings Plan: Exelon’s Employee Savings Plan offers tax-advantaged retirement savings with employer matching contributions. Employees should be aware of contribution limits, matching percentages, and vesting schedules to make the most of the plan. Additionally, employees should consider automatic enrollment features, target-date funds, and the availability of Roth contributions, ensuring they optimize their retirement savings through strategic contribution increases over time.
What retirement resources does Exelon provide to assist employees in understanding their pension options, and how does the company's support aim to facilitate a smooth transition into retirement?
Pension Options Resources: Exelon provides resources like retirement planning tools, financial counseling, and access to benefits specialists to help employees understand their pension options. These resources are designed to assist employees in making informed decisions regarding payout options such as lump sums versus annuities. The company’s goal is to help employees transition smoothly into retirement by offering educational sessions and personalized guidance on maximizing their benefits.
Can you elaborate on the diversity, equity, and inclusion efforts at Exelon, particularly how these initiatives impact the workplace environment for employees approaching retirement, and what specific policies or programs are in place to support them?
Diversity, Equity, and Inclusion (DEI) Efforts: Exelon's DEI initiatives positively impact employees approaching retirement by fostering an inclusive environment where employees from diverse backgrounds are supported in planning for their future. Policies such as anti-age discrimination and flexible working arrangements help ensure that older employees can transition smoothly into retirement while still contributing meaningfully in their final working years(Exelon_Corporation_Febr…).
How can Exelon employees evaluate their nonqualified deferred compensation options as they near retirement, and what implications should they consider regarding taxes and withdrawal strategies?
Evaluating Nonqualified Deferred Compensation: Exelon employees nearing retirement should carefully evaluate their nonqualified deferred compensation options, focusing on timing withdrawals to minimize tax liabilities. These plans are often subject to different tax treatments, and employees should consider potential penalties for early withdrawal and strategize around deferral and distribution schedules to optimize their retirement income.
What role does Exelon’s commitment to ESG principles play in its employee benefits structure, and how might changes in this area influence retirement planning for employees at Exelon?
ESG Principles and Employee Benefits: Exelon’s commitment to Environmental, Social, and Governance (ESG) principles influences its benefits structure by promoting sustainable and responsible practices. Employees may see continued enhancements in green investment options in their retirement plans, and changes to benefits programs may reflect a stronger focus on social responsibility and long-term sustainability, which could affect their retirement planning strategies(Exelon_Corporation_Febr…).
How can employees at Exelon access information about their total compensation packages, including retirement benefits, and what steps should they take to ensure they are maximizing their overall compensation as they approach retirement?
Accessing Total Compensation Information: Exelon employees can access information about their total compensation packages, including retirement benefits, through the company’s HR portal and benefits department. To ensure they are maximizing their compensation as they approach retirement, employees should regularly review their pension, 401(k) contributions, and healthcare benefits, seeking advice from the company’s financial planners or HR representatives(Exelon_Corporation_Febr…).
What constitutes the normal retirement age at Exelon, and how do retirement benefits adjust for employees who retire earlier or later than this age?
Normal Retirement Age and Early/Late Retirement: Exelon’s normal retirement age typically aligns with the age for full pension eligibility, which could be 65 or 67 depending on the plan. Employees who retire earlier may face reduced pension benefits, while those who delay retirement could receive enhanced payouts. It’s crucial for employees to understand how their specific retirement age affects their pension formula(Exelon_Corporation_Febr…).
How can Exelon employees provide feedback on employee benefits during the consultation process, especially those related to retirement, and what channels are available for them to voice their concerns or suggestions?
Providing Feedback on Retirement Benefits: Exelon encourages employees to provide feedback on benefits through regular surveys, town hall meetings, and direct consultations with the HR department. Employees can voice their concerns or suggestions regarding retirement plans during open enrollment periods or scheduled consultations with benefits specialists(Exelon_Corporation_Febr…).
What is the best way for employees to contact Exelon regarding questions about their retirement benefits and other related topics, and which resources or personnel should they turn to for the most accurate and reliable information?
Contacting Exelon for Retirement Questions: Employees with questions about retirement benefits can contact Exelon’s HR department, use the company’s dedicated benefits hotline, or access retirement planning resources on the company’s internal portal. For specific inquiries, employees may also reach out to benefits counselors or attend company-provided retirement planning seminars(Exelon_Corporation_Febr…).
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