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

Essential Year-End Tax Strategies for Public Service Enterprise Group Employees: What You Need to Know Before 2023

Healthcare Provider Update: Healthcare Provider Information: Public Service Enterprise Group Public Service Enterprise Group (PSEG) primarily partners with the UnitedHealthcare network for employee health insurance offerings. This collaboration enables them to provide comprehensive healthcare options for their employees, ensuring a range of services and access to an extensive network of providers. Potential Healthcare Cost Increases in 2026 As we look ahead to 2026, significant increases in healthcare costs are expected, particularly for those relying on Affordable Care Act (ACA) marketplace plans. With some insurers proposing rate hikes exceeding 60% in states like New York, many enrollees could face staggering changes in their financial responsibilities. Factors such as the potential expiration of enhanced federal subsidies-critical for offsetting premium costs-combined with the ongoing rise in healthcare prices, are likely to push average out-of-pocket premiums for many to increase by over 75%. This perfect storm of escalating costs underscores the urgency for consumers to review their healthcare options and prepare financially for the upcoming year. Click here to learn more

Here are some things for Public Service Enterprise Group employees and retirees to consider as they weigh potential tax moves between now and the end of the year.

1. Defer income to next year
Public Service Enterprise Group employees must consider opportunities to defer income to 2023, particularly if you think you may be in a lower tax bracket then. For example, you may be able to defer a year-end bonus or delay the collection of business debts, rent, and payments for services. As a Public Service Enterprise Group employee, doing so may enable you to postpone payment of tax on the income until next year.

2. Accelerate deductions
Public Service Enterprise Group employees and retirees should also look for opportunities to accelerate deductions into the current tax year. If you itemize deductions, making payments for deductible expenses such as medical expenses, qualifying interest, and state taxes before the end of the year (instead of paying them in early 2023) could make a difference on your 2022 return.

3. Make deductible charitable contributions
As a Public Service Enterprise Group employee, if you itemize deductions on your federal income tax return, you can generally deduct charitable contributions, but the deduction is limited to 50% (currently increased to 60% for cash contributions to public charities), 30%, or 20% of your adjusted gross income (AGI), depending on the type of property you give and the type of organization to which you contribute. (Excess amounts can be carried over for up to five years.)

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4. Bump up withholding to cover a tax shortfall
As a Public Service Enterprise Group employee, if it looks as though you will owe federal income tax for the year, consider increasing your withholding on Form W-4 for the remainder of the year to cover the shortfall. Time may be limited for Public Service Enterprise Group employees to request a Form W-4 change and for their employers from Public Service Enterprise Group to implement it in time for 2022. The biggest advantage in doing so is that withholding is considered as having been paid evenly throughout the year instead of when the dollars are actually taken from your paycheck. This strategy can be implemented by Public Service Enterprise Group employees to make up for low or missing quarterly estimated tax payments.

5. Save more for retirement
Deductible contributions to a traditional IRA and pre-tax contributions to a Public Service Enterprise Group-sponsored retirement plan such as a 401(k) can reduce your 2022 taxable income. As a fortune 500 employee, if you haven't already contributed up to the maximum amount allowed, consider doing so. For 2022, Public Service Enterprise Group employees can contribute up to $20,500 to a 401(k) plan ($27,000 if you're age 50 or older) and up to $6,000 to traditional and Roth IRAs combined ($7,000 if you're age 50 or older).* The window to make 2022 contributions to a Public Service Enterprise Group-sponsored plan generally closes at the end of the year, while you have until April 18, 2023, to make 2022 IRA contributions.

*Roth contributions are not deductible, but Roth-qualified distributions are not taxable.

6. Take the required minimum distributions
If you are a Public Service Enterprise Group employee age 72 or older, you generally must take required minimum distributions (RMDs) from traditional IRAs and Public Service Enterprise Group-sponsored retirement plans (special rules apply if you're still working and participating in Public Service Enterprise Group's retirement plan). You have to make the withdrawals by the date required — the end of the year for most individuals. The penalty for failing to do so is substantial: 50% of the amount that wasn't distributed on time. As a fortune 500 employee, making these distributions in a timely manner is essential as to avoid the late penalty.

7. Weigh year-end investment moves
Public Service Enterprise Group employees and retirees shouldn't let tax considerations drive investment decisions. However, it's worth considering the tax implications of any year-end investment moves that you make. For example, if you have realized net capital gains from selling securities at a profit, you might avoid being taxed on some or all of those gains by selling losing positions. As a Public Service Enterprise Group employee, any losses over and above the number of your gains can be used to offset up to $3,000 of ordinary income ($1,500 if your filing status is married filing separately) or carried forward to reduce your taxes in future years.

Tags: Financial Planning , Tax , Retirement , 2022

In the context of the Public Service Enterprise Group (PSEG), how do the changes to the pension plans effective July 1, 2019, specifically under the new Pension Plan II, affect the retirement benefits of long-term employees? It is essential to analyze the implications of the pension plan structure for employees who have served under the traditional pension plans. Describe how the transition to a new structure influences retirement security for those planning to retire soon.

The changes to PSEG's pension plans effective July 1, 2019, with the introduction of Pension Plan II, primarily impacted the retirement benefits for long-term employees by maintaining the same benefits structure as under the original plans but splitting assets and liabilities between the new and old plans. Pension Plan II is for active participants, while the original Pension Plan is now predominantly for retired and terminated vested participants. For long-term employees, the retirement security is preserved, with no changes in the benefits themselves; however, the split aimed to reduce pension expense variability(Public_Service_Enterpri…).

Given the evolving nature of retirement plans, what are the key distinctions between the Final Average Pay Component and the Cash Balance Component of PSEG's Pension Plan II? Employees may find it crucial to understand these differences in determining their retirement strategies. Discuss how these components work and the potential advantages and disadvantages each offers to future retirees within PSEG.

The key distinctions between the Final Average Pay Component and the Cash Balance Component of PSEG’s Pension Plan II lie in how retirement benefits are calculated. The Final Average Pay Component is based on a formula that considers the employee's highest years of earnings and years of service, while the Cash Balance Component accumulates benefits in a hypothetical account with company contributions and interest credits. The Final Average Pay Component offers more predictability based on salary and tenure, while the Cash Balance Component provides flexibility but may lead to less predictable retirement income(Public_Service_Enterpri…).

How does the pension benefit formula in the Final Average Pay Component affect employees at PSEG, particularly in relation to their years of service and highest earning years? Understanding this formula is vital for employees approaching retirement. Analyze how the changes implemented on January 1, 2012, altered the benefit calculations and what impacts this may have for current employees nearing their retirement age.

The pension benefit formula in the Final Average Pay Component at PSEG is based on a percentage of the employee's average compensation during their highest earning years and years of service. Before January 1, 2012, the calculation was based on the average of the five highest years, but after this date, it switched to the average of the seven highest years, slightly reducing projected pension benefits. Employees with long service nearing retirement will be affected by this change, potentially seeing lower pension benefits due to the broader earnings period(Public_Service_Enterpri…).

With regard to the additional benefits outlined for retirees from the PSEG pension plans, how do these supplements influence the overall retirement income of employees? It is important to consider not only the base pension benefit but also how additional payments, such as those based on credited service, contribute to financial well-being in retirement. Discuss the significance of these additional benefits and how they fit into broader retirement planning.

Additional benefits for retirees from the PSEG pension plans, such as monthly supplements based on years of credited service, enhance overall retirement income. These supplements, including the $4 to $5 per month benefit for each year of credited service, help retirees manage their financial needs better, particularly in the early years of retirement before other benefits (such as Social Security) may become available. These supplements add an important layer of security and stability to retirement planning(Public_Service_Enterpri…).

In what ways does Public Service Enterprise Group ensure that employees understand their options under the new Pension Plan II regarding participation and benefits? This understanding is crucial for employees making informed decisions about their retirements. Explore the methods and resources PSEG provides to assist employees in navigating their pension plan options and the potential consequences of their choices.

PSEG ensures employees understand their options under Pension Plan II by providing resources such as detailed plan summaries, educational sessions, and retirement calculators. These tools help employees navigate complex decisions about participation and benefit choices. The company also offers access to pension counselors who can assist employees in evaluating the long-term consequences of their retirement decisions(Public_Service_Enterpri…).

How do the eligibility criteria for retirement benefits under PSEGâ€™s pension plans promote long-term retention and career stability among employees? Discuss how these criteria influence employee commitment and motivation, as well as the overall work culture within PSEG. Highlight the link between pension plan structures and employee satisfaction and retention.

The eligibility criteria for retirement benefits under PSEG’s pension plans are designed to promote long-term retention by providing attractive benefits based on years of service and age. Employees become fully vested after completing five years of service, and the availability of unreduced benefits at age 65, or earlier for those meeting specific age and service combinations, encourages career stability and loyalty to the company(Public_Service_Enterpri…).

How can employees at Public Service Enterprise Group plan their retirement effectively given the various pension options available, and what strategies can they employ to maximize their benefits? Retirement planning is a critical aspect of financial security for employees. Delve into the specific strategies that employees can utilize to take full advantage of their pension options at PSEG, including investment options, service credits, and benefit selection.

PSEG employees can plan their retirement effectively by leveraging the company's pension plans and service credits. Key strategies include maximizing service years to increase benefit accruals, understanding the impact of early retirement, and choosing the optimal benefit structure between the Final Average Pay and Cash Balance Components. Employees can also take advantage of investment options within their pension plans to enhance long-term financial security(Public_Service_Enterpri…).

As employees at PSEG look towards retirement, what are the most common misconceptions about pension benefits that they should be aware of? Misinformation can lead to poor decision-making regarding retirement planning. Analyze these misconceptions and provide clarity on the actual benefits, eligibility, and features of the PSEG pension plans, ensuring employees have accurate information to guide their choices.

Common misconceptions about PSEG’s pension benefits include the belief that all benefits stop at retirement or that there is no flexibility in retirement age. In fact, employees can choose early retirement with reduced benefits or continue working past 65 to accrue more service credits. Another misconception is that the Cash Balance Component is always inferior to the Final Average Pay Component, which may not be true depending on individual financial goals and work history(Public_Service_Enterpri…).

Given the changes in pension plan structures, what advice would you give to employees at PSEG regarding when to start planning their retirement, and how can they utilize the information available in the companyâ€™s retirement resources? Discuss the importance of timing in retirement planning and how employees can best leverage the resources provided by PSEG to prepare for retirement effectively.

Employees at PSEG should start planning their retirement as early as possible, ideally at least ten years before their planned retirement date. The company provides various resources, including financial planning tools, benefit calculators, and pension counseling, which help employees make informed decisions. Timing is crucial, especially when determining early retirement options and how different components of the pension plan will affect final benefits(Public_Service_Enterpri…).

How can employees at Public Service Enterprise Group contact the company to learn more about the benefits and features of their pension plans and retirement options? Understanding the communication pathways available for obtaining information is key for employees considering their retirement plans. Discuss the channels through which employees can reach out to PSEG for assistance and the types of inquiries they can make-related to their pension benefits.

Employees at PSEG can contact the company to learn more about their pension plans and retirement options through HR support, pension plan counselors, and official resources such as plan documents and summaries available on the company's intranet. Inquiries can cover topics such as benefit calculations, retirement age options, service credits, and plan changes, ensuring employees have all the necessary information to make informed retirement decisions(Public_Service_Enterpri…).