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

Beyond the 401k Cap: Advanced Retirement Tactics for Citigroup Employees

Healthcare Provider Update: Healthcare Provider for Citigroup: Citigroup's primary healthcare provider is UnitedHealthcare, which offers a range of health insurance products for Citigroup employees, including employer-sponsored plans that provide comprehensive coverage. Potential Healthcare Cost Increases in 2026: As we look ahead to 2026, healthcare costs associated with the Affordable Care Act (ACA) are projected to rise dramatically. With insurers requesting average premium increases of 18% and some states seeing hikes surpassing 60%, millions of consumers could face unprecedented out-of-pocket costs. Key factors driving these increases include the potential expiration of enhanced federal premium subsidies, which could lead to a staggering 75% increase in out-of-pocket premiums for approximately 92% of marketplace enrollees. The combination of escalating medical costs and the withdrawal of financial assistance presents a significant financial challenge for many families across the nation. Click here to learn more

'By leveraging health savings accounts, Roth conversion pathways, annuities, and intentional asset location, Citigroup employees can reduce their lifetime tax burden and establish a diversified suite of retirement income sources.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.

'By thoughtfully combining health savings accounts, Roth conversion strategies, and strategic asset placement, Citigroup employees can optimize tax efficiency and bolster their retirement income flexibility.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

Leveraging Health Savings Accounts and tax-advantaged rollovers to extend retirement savings.
Advanced Roth strategies (backdoor and mega backdoor) for high-income earners.
Using annuities and tax-efficient brokerage techniques to diversify and preserve assets.

High-Income Earners’ Advanced Retirement Savings Strategies

Retirement planning presents unique opportunities and challenges for Citigroup employees who have reached the IRS limit on 401k contributions or whose income prevents direct Roth IRA funding. To build on strong saving habits and substantial assets, it help to understand alternative techniques that extend tax-advantaged growth beyond traditional workplace plans.

1. Health Savings Accounts (HSAs) as a Long-Term Investment Vehicle

Health Savings Accounts offer a remarkable “triple tax advantage”: contributions reduce taxable income, investment growth is tax-free, and qualified medical withdrawals remain untaxed, making HSAs one of the most efficient savings tools available. Citigroup employees enrolled in a high-deductible health plan can contribute up to the 2025 IRS caps—$4,300 for self-only coverage and $8,550 for family coverage, plus a $1,000 catch-up for those 55 and older. ¹ Non-medical withdrawals after age 65 incur ordinary income tax (but no penalty), enhancing flexibility, while premature non-qualified distributions face a 20% penalty, underscoring the need for disciplined planning.

2. The Backdoor Roth IRA: Unlocking Tax-Free Growth

Although direct Roth IRA contributions phase out at higher incomes, Citigroup employees can still tap a backdoor Roth IRA by making a non-deductible contribution to a traditional IRA and immediately converting to a Roth. ² The IRS’s pro-rata aggregation rules require careful calculation when you hold other traditional IRAs, as conversions consider the aggregate pre- and after-tax balances, potentially triggering tax liabilities. Given the IRA contribution limit of $7,000 ($8,000 for those age 50 and above), working with a financial advisor can help facilitate smooth execution and manage potential tax on conversions.

3. The Mega Backdoor Roth: Supercharging Roth Savings

For those with eligible employer plans, the “mega backdoor Roth” ³ can significantly boost Roth balances by contributing after-tax dollars above standard 401k limits and then rolling them into a Roth IRA or Roth 401k via in-service distributions. With 2025 combined employee/employer contribution caps of $70,000 (or $77,500 including catch-ups), ⁴ this strategy can create substantial additional tax-free retirement income. Because only about 20% of plans offer the necessary features, confirm with HR whether your Citigroup plan supports after-tax contributions and in-service rollovers, and coordinate with advisors to optimize timing and tax efficiency.

4. Tax-Deferred Annuities to Extend Tax-Advantaged Savings

When you’ve exhausted IRAs and employer plans, tax-deferred annuities provide another avenue to shelter earnings from current taxation. Fixed annuities offer a stable interest rate, while variable annuities invest in market-linked subaccounts—allowing reallocation without immediate tax events. ⁵ Although earnings and withdrawals are taxed as ordinary income and early withdrawals before age 59½ may incur a 10% penalty, annuities can include income commitments or death benefits. Before adding an annuity, Citigroup employees should evaluate fees, investment options, and the insurer’s strength to confirm alignment with overall retirement goals.

5. Tax-Efficient Techniques in Brokerage Accounts

In addition to having no contribution limits, taxable accounts offer considerable flexibility and asset choice. Citigroup employees can enhance after-tax returns by favoring low-turnover ETFs for tax efficiency, selecting tax-managed mutual funds, and using separately managed accounts (SMAs) for bespoke strategies like tax-loss harvesting. Strategic asset location—placing tax-inefficient bonds in IRAs/401ks and tax-efficient equities or municipal bonds in brokerage—can further reduce annual tax drag. ⁶ According to Vanguard, disciplined asset placement can boost after-tax wealth by up to 0.30% per year, ⁷ demonstrating the value of meticulous tax management.

Conclusion

After reaching the contribution limit on your Citigroup 401k, advanced tactics such as HSAs, backdoor and mega backdoor Roth IRAs, tax-deferred annuities, and tax-efficient brokerage strategies allow high-income earners to diversify retirement income sources and mitigate lifetime taxes. Staying informed on IRS rules—like the SECURE 2.0 Act’s changes—and using tools such as Qualified Charitable Distributions can further help manage required distributions and Medicare implications. Proactive planning and professional guidance help make every dollar saved work harder for your retirement goals.

Featured Video

Articles you may find interesting:

Sources:

1. Internal Revenue Service. ' Revenue Proclamation 2024-25 .' Accessed 31 July 2025.

2. Fidelity Investments. “ Backdoor Roth IRA: Is It Right for You? ” Fidelity Viewpoints, 19 Dec. 2024. Accessed 13 July 2025.

3. MarketWatch. “ This Roth Strategy Lets Elite Savers Stash $70,000 in Their 401(k) in 2025 ,” by Vanessa Wong, 20 Nov. 2024. Accessed 13 July 2025.

4. IRS. ' 401(k) limit increases to $#23,500 for 2025, IRA limit remains $7,000 ,' 1 Nov. 2024. Accessed 31 July 2025.

5. Investopedia. “ Annuities Taxation Explained: What You Need to Know Before Investing ,” by The Investopedia Team, 15 June 2024. Accessed 13 July 2025.

6. Charles Schwab. “ How Asset Location Can Help Save on Taxes ,” by Hayden Adams, 11 Oct. 2024. Accessed 13 July 2025.

7. Vaguard. ' Asset location can lead to lower taxes. Here's how to get more value, ' 16 Aug. 2024. Accessed 31 July 2025.

What are the main eligibility criteria for participating in the Citigroup Pension Plan, and how can Citigroup employees ensure they meet these requirements throughout their employment? Furthermore, what implications does the merger of prior pension plans into the Citigroup Pension Plan have on the benefits for employees from acquired companies, and what steps should they take to understand how their previous service is credited under Citigroup?

Eligibility Criteria for Citigroup Pension Plan Participation: Employees hired before January 1, 2007, are eligible to participate in the Citigroup Pension Plan if they were employees of a Participating Employer. Employees hired after that date are generally not eligible to participate. Additionally, employees from acquired companies may have their prior service credited under Citigroup. It's important for these employees to review the plan's specific provisions or contact the Citi Pension Center to ensure accurate service credit(Citigroup_Pension_Plan_…).

How does the Citigroup Pension Plan address survivor benefits for employees who pass away before their pension benefits commence, and what steps must their beneficiaries take to claim these benefits? Additionally, how can employees ensure that their loved ones are adequately informed about the options available should they face this unfortunate event?

Survivor Benefits for Pre-Retirement Death: If an employee passes away before benefits commence, the surviving spouse may receive a lifetime annuity based on the account balance or opt for a lump sum. Employees should ensure that their beneficiaries are aware of these options and the process to claim benefits(Citigroup_Pension_Plan_…).

For Citigroup employees wanting to learn more about the pension plan's benefits and options available to them, what contact methods should they use? How does Citigroup facilitate communication regarding the pension plan, and what are the most efficient ways for employees to get their questions answered?

Contacting Citigroup for Pension Plan Inquiries: Employees can contact the Citi Pension Center by phone at 1-800-881-3938 for U.S. inquiries or use the online portal to access their pension details. These methods provide the most efficient way to get answers to any pension-related questions(Citigroup_Pension_Plan_…).

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

Citigroup offers both a traditional defined benefit pension plan and a defined contribution 401(k) plan. The defined benefit plan provides retirement income based on years of service and final average pay. The 401(k) plan includes company matching contributions and various investment options such as target-date funds and mutual funds. Citigroup also provides financial planning resources and tools to help employees manage their retirement savings.

Citigroup is planning to cut 20,000 jobs as part of a major restructuring effort to streamline operations and save $2.5 billion. The bank is also focusing on international growth and simplifying its management structure from 13 layers to eight. Despite the layoffs, Citigroup continues to offer comprehensive retirement benefits, including 401(k) plans and health benefits. Understanding these benefits is important in today's political environment.

Citigroup grants RSUs that vest over several years, giving employees shares upon vesting. They also provide stock options, allowing employees to purchase shares at a set price.