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 Nordstrom Employee?

Healthcare Provider Update: Healthcare Provider for Nordstrom For its healthcare needs, Nordstrom partners primarily with Aetna, Premera, and Kaiser Permanente to provide health insurance plans to its employees. Each of these insurers offers various options, including high-deductible plans accompanied by Health Savings Accounts (HSAs), allowing employees to manage their healthcare expenses more effectively. Potential Healthcare Cost Increases in 2026 In 2026, healthcare costs for Nordstrom employees may see significant increases due to projected hikes in Affordable Care Act (ACA) premiums. Many states are anticipating rate increases of over 20%, with places like New York facing hikes exceeding 66%. The expiration of enhanced ACA subsidies will exacerbate these financial pressures, with projections suggesting that more than 22 million enrolled individuals could see their premiums surge by over 75%. This perfect storm of rising medical costs and subsidy losses will require employees to prepare for a substantial rise in their out-of-pocket healthcare expenses. Click here to learn more

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

Internal management fees might be higher than in a Nordstrom-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 Nordstrom-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 Nordstrom.

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 Nordstrom 401(k) plan?

The Nordstrom 401(k) plan is a retirement savings plan that allows eligible employees to save for their future by contributing a portion of their earnings before taxes.

How can I enroll in the Nordstrom 401(k) plan?

You can enroll in the Nordstrom 401(k) plan by accessing the employee benefits portal or contacting the HR department for guidance on the enrollment process.

What is the employer match for the Nordstrom 401(k) plan?

Nordstrom offers a matching contribution to your 401(k) plan, which typically matches a percentage of your contributions up to a certain limit, helping you save more for retirement.

When can I start contributing to the Nordstrom 401(k) plan?

Eligible employees can start contributing to the Nordstrom 401(k) plan after completing a specified waiting period, usually within the first few months of employment.

What types of investments are available in the Nordstrom 401(k) plan?

The Nordstrom 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose investments that align with their retirement goals.

Can I change my contribution rate for the Nordstrom 401(k) plan?

Yes, you can change your contribution rate for the Nordstrom 401(k) plan at any time, subject to certain limits and guidelines set by the plan.

Is there a vesting schedule for Nordstrom's 401(k) matching contributions?

Yes, Nordstrom has a vesting schedule for its matching contributions, meaning that you must work for the company for a certain period before you fully own the employer contributions.

What happens to my Nordstrom 401(k) plan if I leave the company?

If you leave Nordstrom, you can choose to roll over your 401(k) balance to another retirement account, cash it out (subject to taxes and penalties), or leave it in the Nordstrom plan if eligible.

Can I take a loan from my Nordstrom 401(k) plan?

Yes, Nordstrom allows employees to take loans from their 401(k) plan, subject to certain terms and conditions outlined in the plan documents.

Are there hardship withdrawal options available in the Nordstrom 401(k) plan?

Yes, Nordstrom offers hardship withdrawal options for employees facing financial difficulties, allowing access to funds under specific circumstances defined by the plan.

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: Nordstrom offers a defined benefit pension plan named the Nordstrom Retirement Plan. Years of Service and Age Qualification: Employees are eligible for the Nordstrom Retirement Plan after 5 years of service, and they must be at least 55 years old to start receiving benefits. Pension Formula: The pension benefits are calculated based on years of service and average salary. Specific formulas and details are outlined in the plan document. Name of 401(k) Plan: The 401(k) plan offered by Nordstrom is named the Nordstrom 401(k) Savings Plan. Qualification for 401(k) Plan: Employees are eligible to participate in the Nordstrom 401(k) Savings Plan from their first day of employment. Company Match: Nordstrom provides a company match up to a certain percentage of the employee’s contributions.

Restructuring and Layoffs: In 2023, Nordstrom announced a restructuring plan aimed at streamlining its operations and improving profitability. This included a significant reduction in workforce, with several hundred employees being laid off as part of a broader strategy to reduce costs and enhance efficiency. The company stated that these changes were essential to adapt to shifting market conditions and consumer behavior. 2. Changes to Benefits and Pension Plans: In response to economic pressures, Nordstrom has made adjustments to its employee benefits and pension plans. The company has introduced changes to its 401(k) matching contributions, reducing the amount of company contributions to employee retirement accounts. Additionally, modifications were made to health benefits to control costs, affecting the coverage levels and out-of-pocket expenses for employees.**

Nordstrom offers stock options and RSUs as part of its employee compensation package. These benefits are available to various levels of employees, often including executives and key staff members. Stock options at Nordstrom give employees the right to purchase shares at a set price, while RSUs are company shares granted to employees after meeting certain conditions.

2022-2023: Nordstrom updated its healthcare plans to include enhanced mental health services and telehealth options. They also introduced flexible spending accounts (FSAs) and health savings accounts (HSAs) to provide more financial flexibility for employees. 2024: There have been announcements of new partnerships with healthcare providers to improve access to quality care and reduce costs for employees. Nordstrom is focusing on preventive care and wellness programs.