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Is a Rollover into an IRA the Right Move for You as a American Airlines Group Employee?

Choosing an IRA rollover means that your money remains tax-advantaged and capable of growth, as in a American Airlines Group-sponsored plan. You may also gain more investment options than what may have been available in your American Airlines Group-sponsored plan. You may also gain oversight of managing these important retirement assets from your trusted Advisor.

If you roll your retirement plan assets over into an IRA account that you already own through your Advisor, you also receive the benefit of combined statements and holistic investment planning, making it easier to track your overall financial situation.

'Receive the benefit of combined statements and holistic investment planning, making it easier to track your overall financial situation.'

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Some of the benefits of rolling your money into an IRA include:

Tax-deferred growth potential: This generally avoids current income tax and distribution penalties when removed from a American Airlines Group-sponsored retirement plan.

More investment choices: This allows for additional contributions, if eligible. IRAs can be combined and handled by one provider, thereby reducing trustee costs and consolidating statements. Protection from creditors in federal bankruptcy proceedings. The combined amount of your required minimum distributions (RMDs) can be taken from any of your Traditional, SEP or SIMPLE IRAs.

However, there are also some important considerations that American Airlines Group should make before rolling over their money into an IRA, these include:

Internal management fees might be higher than in a American Airlines Group-sponsored retirement plan.
Fees and expenses depend largely on the investments you choose.
Loans from an IRA are not allowed.
Early distributions may be subject to a 10% IRS tax penalty in addition to income tax.
RMDs begin April 1 following the year you reach 70½ and annually thereafter; leaving the money in the former Fortune-500 plan may allow RMDs to be delayed until separation from service.
IRAs are subject to state laws governing malpractice, divorce, creditors (outside of bankruptcy), and other lawsuits; leaving the money in the former American Airlines Group-plan may provide additional protection against creditors.
Net unrealized appreciation (NUA) is the difference between what you paid for employer securities and their increased value. You lose favorable tax treatment of NUA if the funds are rolled into an IRA.

Hopefully, these insights will be helpful as you plan your retirement from American Airlines Group.

For more information about this topic, view our e-book here: https://retirekit.theretirementgroup.com/will-your-retirement-plan-retire-with-you-e-brochure-offer

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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.

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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.