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

Is a Rollover into an IRA the Right Move for You as a Illinois Tool Works Employee?

Healthcare Provider Update: Healthcare Provider for Illinois Tool Works: Illinois Tool Works (ITW) primarily partners with Blue Cross Blue Shield (BCBS) of Illinois as their healthcare provider. This choice reflects a focus on comprehensive coverage options for their employees, aligning with the company's commitment to employee health and well-being. Potential Healthcare Cost Increases in 2026: In 2026, healthcare costs are expected to surge, with Blue Cross Blue Shield in Illinois anticipating an overall premium increase of approximately 27%. This spike is driven by a confluence of factors, including escalating medical expenses, diminishing federal premium subsidy support, and substantial hikes from major insurers. As the Affordable Care Act premiums rise sharply-potentially impacting 22 million enrollees-ITW's employees may face considerable out-of-pocket costs if no congressional action is taken to extend the enhanced subsidies. This underscores the necessity for proactive strategies in managing healthcare expenses amidst rapidly changing market dynamics. Click here to learn more

Choosing an IRA rollover means that your money remains tax-advantaged and capable of growth, as in a Illinois Tool Works-sponsored plan. You may also gain more investment options than what may have been available in your Illinois Tool Works-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 Illinois Tool Works-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 Illinois Tool Works should make before rolling over their money into an IRA, these include:

Internal management fees might be higher than in a Illinois Tool Works-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 Illinois Tool Works-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 Illinois Tool Works.

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 retirement savings options does Illinois Tool Works offer to its employees?

Illinois Tool Works offers a 401(k) plan as part of its retirement savings options for employees.

How can employees of Illinois Tool Works enroll in the 401(k) plan?

Employees of Illinois Tool Works can enroll in the 401(k) plan by completing the enrollment process through the company’s benefits portal or by contacting the HR department for assistance.

Does Illinois Tool Works provide a company match for the 401(k) contributions?

Yes, Illinois Tool Works provides a company match for employee contributions to the 401(k) plan, subject to specific terms and conditions.

What is the maximum contribution limit for the 401(k) plan at Illinois Tool Works?

The maximum contribution limit for the 401(k) plan at Illinois Tool Works is determined by the IRS guidelines, which can change annually.

Can employees of Illinois Tool Works take loans against their 401(k) savings?

Yes, employees of Illinois Tool Works may have the option to take loans against their 401(k) savings, subject to the plan's rules.

What investment options are available in the Illinois Tool Works 401(k) plan?

The Illinois Tool Works 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.

How often can employees change their contribution amount to the Illinois Tool Works 401(k) plan?

Employees of Illinois Tool Works can typically change their contribution amount on a quarterly basis or as specified in the plan details.

What happens to my Illinois Tool Works 401(k) if I leave the company?

If you leave Illinois Tool Works, you can choose to roll over your 401(k) balance to another retirement account, keep it in the Illinois Tool Works plan (if eligible), or withdraw the funds, subject to taxes and penalties.

Is there a vesting schedule for the company match in the Illinois Tool Works 401(k) plan?

Yes, Illinois Tool Works has a vesting schedule for the company match, which means employees must work for a certain period to fully own the matched contributions.

Can part-time employees participate in the Illinois Tool Works 401(k) plan?

Yes, part-time employees at Illinois Tool Works may be eligible to participate in the 401(k) plan, depending on specific criteria set by the company.

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

Name of Pension Plan: Illinois Tool Works Pension Plan Years of Service and Age Qualification: Employees typically need to have a minimum of 5 years of service to qualify for the pension plan. Full benefits may be available to employees who are at least 65 years old or have reached a combination of age and service requirements totaling at least 85 years. Pension Formula: The pension is calculated based on years of service and the average of the highest-paid years of salary. For example, it may be calculated as 1.5% of the average of the highest 5 years of salary multiplied by years of service. Name of 401(k) Plan: Illinois Tool Works 401(k) Plan Who Qualifies: All full-time employees who are at least 21 years old and have completed 90 days of service are eligible to participate in the 401(k) plan. 401(k) Plan Features: Employees can contribute a percentage of their salary up to the annual limit set by the IRS. The company may provide matching contributions up to a certain percentage of the employee's contributions. Document: Illinois Tool Works 2024 Benefits Summary

Restructuring and Layoffs: In 2023, Illinois Tool Works announced a restructuring plan aimed at streamlining operations and improving efficiency. This plan included workforce reductions in certain sectors to adapt to shifting market demands and economic pressures. The company stated that these changes are intended to bolster its competitive position in a challenging economic environment. The importance of addressing this news is heightened due to the current economic landscape, where companies are adjusting their structures to maintain profitability amid fluctuating economic conditions. Understanding these changes is crucial for employees and stakeholders to navigate the evolving business environment and its impact on their roles and benefits.

ITW offers stock options and RSUs as part of their employee compensation packages. Stock options at ITW allow employees to purchase company stock at a set price, usually granted to senior executives and key employees. ITW provides RSUs, which are granted to employees as a form of equity compensation, usually vesting over several years. The company typically awards these to employees based on performance and seniority.

Health Insurance: ITW offers comprehensive health insurance plans, including medical, dental, and vision coverage. Employees can choose from multiple plan options to fit their needs. Wellness Programs: The company provides wellness programs that include resources for mental health, fitness, and preventive care. Retirement Savings: ITW offers 401(k) plans with company matching contributions and other financial wellness programs.