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

FAQs on RMDs: What Southern California Edison Employees Need to Know

Healthcare Provider Update: Healthcare Provider for Southern California Edison: Southern California Edison (SCE) primarily utilizes Blue Shield of California as its healthcare provider for employees. This partnership enables the company to offer a variety of health insurance options to its workforce, including comprehensive coverage options tailored to meet the diverse needs of its employees. Potential Healthcare Cost Increases in 2026: As the healthcare landscape shifts, Southern California Edison employees may see a significant impact on healthcare costs in 2026. With projected record increases in insurance premiums-some states reporting hikes exceeding 60%-combined with the potential expiration of enhanced federal subsidies, many employees could face out-of-pocket premium spikes exceeding 75%. Factors contributing to this trend include rising medical costs and aggressive rate hikes from major insurers, which underline the importance of strategic planning for healthcare expenses as retirement approaches. Adapting to these changes is essential for maintaining financial stability and ensuring access to necessary healthcare services. Click here to learn more

'RMDs may feel restrictive, but for Southern California Edison employees they also create structured opportunities to rebalance portfolios, manage taxable income, and strengthen long-term planning.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'By treating RMDs as a planning tool rather than just a tax requirement, Southern California Edison employees can use them to create flexibility in withdrawals and align retirement income with broader financial goals.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

Which retirement accounts are subject to RMDs and recent legislative changes.
Strategies that Southern California Edison employees can use to manage the tax impact of RMDs.
How market conditions and long-term planning interact with RMD requirements.

By Wealth Enhancement Group's Brent Wolf

RMDs, or required minimum distributions, are a critical consideration for retirement income planning. Because they are required, they are sometimes seen as burdensome, but they also offer opportunities for careful money management. For Southern California Edison employees, understanding how RMDs work and incorporating them into a broader strategy can help improve portfolio efficiency and mitigate long-term tax impacts.

Accounts Subject to RMDs

Traditional tax-deferred retirement accounts, which are funded with pre-tax contributions and grow tax-deferred, fall under RMD rules. These include SEP IRAs, 403(b) plans, 401(k) plans, 457 plans, and traditional IRAs. Once individuals reach a certain age, withdrawals are mandatory. Roth accounts stand out as exceptions. Roth IRAs remain permanently free of RMDs, while Roth 401(k) plans are also exempt under recent legislation. For Southern California Edison workers nearing retirement, this exemption may enhance the role that Roth accounts can play as long-term planning tools, since assets can continue growing without taxable withdrawals.

Changing Ages for RMDs

The age at which retirees must begin taking RMDs has shifted in recent years. For decades, it was 70½. It later increased to 72, and then to the current age of 73. Beginning in 2033, the starting age will move again to 75. For Southern California Edison retirees, these adjustments provide more flexibility and open a wider window to implement strategies such as Roth conversions, systematic withdrawals, or portfolio rebalancing before RMDs take effect.

Why RMDs Are Often Disliked

RMDs are unpopular among retirees who don't require the funds for their current living expenses because they trigger taxable income. This added income can push retirees into higher tax brackets, raising their overall tax burden. For Southern California Edison employees with substantial retirement savings, RMDs can also affect Medicare costs through higher income-related monthly adjustment amount (IRMAA) surcharges. In many cases, RMDs represent a significant annual tax consideration for households.

Techniques to Manage RMDs

Although RMDs for traditional accounts cannot be fully eliminated, several approaches can help reduce their taxable impact:

Pre-Retirement Diversification: Spreading savings across Roth accounts, taxable brokerage accounts, and traditional retirement plans may lower future RMD obligations.
The Early Retirement Window: For those who stop working before 73, the years between retirement and the first RMD are often lower-income years—ideal for Roth conversions or accelerated withdrawals at more favorable tax rates.
Qualified Charitable Distributions (QCDs): Starting at 70½, IRA owners can direct RMD distributions directly to qualified charities, rather than taking them themselves, reducing taxable income while meeting RMD requirements and achieving charitable goals.
Still Working Past 73: Employees still working at Southern California Edison after age 73 may be able to delay RMDs on their active employer plan.
Legacy Planning: Roth conversions, even after RMDs start, can lower the taxable inheritance left to beneficiaries, aiding in estate planning.

Market Conditions and RMDs

A common question is whether market downturns affect RMD amounts. The answer is no—RMDs are based on account balances as of December 31 of the prior year. Short-term fluctuations do not alter the required withdrawal. While Congress has occasionally suspended RMDs during crises, such as in the pandemic, these suspensions remain rare.

Turning RMDs Into Opportunities

Although RMDs are mandatory, they can be reframed as tools for portfolio management. By selling from overweighted positions, retirees can meet their RMD while also rebalancing. For Southern California Edison retirees with large equity allocations, this may mean using withdrawals to trim stock-heavy portfolios in favor of diversification.

Additionally, funds withdrawn through RMDs need not sit idle. If not required for daily expenses, they can be reinvested into a Roth IRA (subject to eligibility) or taxable brokerage account. This reinvestment can help maintain long-term portfolio growth.

Conclusion

While RMDs are often viewed as mandatory tax obligations, Southern California Edison employees can approach them strategically. Diversifying account types before retirement, making use of early retirement years, using QCDs, and considering Roth conversions all provide ways to manage the impact. When integrated into a broader financial plan, RMDs can serve as both compliance and opportunity—helping retirees sustain portfolio health, mitigate taxes, and extend financial growth into the future.

Custodians typically calculate RMD amounts and provide reminders, but the responsibility to take the correct distribution rests with the account holder. By anticipating these requirements and using them to rebalance or reinvest, Southern California Edison retirees can approach RMDs as part of a proactive retirement strategy.

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Sources:

Internal Revenue Service. Publication 590-B: Distributions from Individual Retirement Arrangements (IRAs). U.S. Department of the Treasury, Mar. 19, 2025. pp. 6–7, 37. https://www.irs.gov/publications/p590b

Myers, Elizabeth A. Required Minimum Distribution (RMD) Rules for Original Owners of Retirement Accounts. Congressional Research Service, 29 Aug. 2024. p. 1. https://crsreports.congress.gov/product/pdf/IF/IF12750

Centers for Medicare & Medicaid Services. Medicare Costs 2025. CMS Product No. 11579, Dec. 2024. pp. 2–3. https://www.cms.gov/newsroom/fact-sheets/2025-medicare-parts-b-premiums-and-deductibles

Social Security Administration. Form SSA-44: Medicare Income-Related Monthly Adjustment Amount — Life-Changing Event. SSA, Dec. 2024. pp. 1, 5–7. https://www.ssa.gov/forms/ssa-44.pdf

Financial Industry Regulatory Authority. Thinking About Rolling Over Funds From Your Thrift Savings Plan? Consider This. FINRA, Nov. 2024. p. 2. https://www.finra.org/investors/military/retirement/roll-over-tsp

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

Defined Benefit Plan: Southern California Edison offers a traditional defined benefit pension plan for employees hired before December 31, 2017. This plan provides a stable retirement income based on years of service and final average pay. The pension rates are adjusted annually, and employees can view their pension benefits through the EIX Benefits portal. Grandfathered employees receive the higher of two lump-sum values if applicable. Cash Balance Plan: The cash balance pension plan is available to most employees. This plan credits a percentage of the employee's salary annually to an account that grows with interest. The interest rates for the cash balance plan are announced yearly, impacting the final pension amount. Defined Contribution Plan: SCE also offers a 401(k) plan with a competitive match. Recent hires can receive up to a 10% match on their 401(k) contributions. The plan includes various investment options, such as target-date funds, asset class funds, and a Personal Choice Retirement Account (PCRA) for additional investment flexibility. Employees can also take advantage of an auto-save feature to gradually increase their contribution rates over time. Additional Benefits: In addition to the pension and 401(k) plans, SCE provides other retirement benefits, such as life insurance, profit-sharing contributions, and comprehensive retirement planning resources.

Wildfire Mitigation and Safety: Southern California Edison has significantly reduced the probability of wildfires associated with its equipment by 75%-80% since 2018. Their 2023-25 Wildfire Mitigation Plan includes measures like grid hardening, installing covered conductors, and enhanced vegetation management to further reduce wildfire risks and improve grid safety (Source: Edison International). Industry Impact: The dismantling of California’s rooftop solar program led to the loss of over 17,000 jobs in the clean energy sector, impacting SCE and other utilities. The policy changes have triggered significant layoffs (Source: Environmental Working Group). Operational Efficiency: SCE is focused on improving operational efficiency and reducing costs amidst evolving energy markets (Source: Intellizence).

Southern California Edison provides stock options and RSUs as part of its equity compensation packages. Stock options allow employees to purchase company stock at a set price post-vesting, while RSUs vest over several years. In 2022, Southern California Edison enhanced its equity programs with performance-based RSUs. This approach continued in 2023 and 2024, with broader RSU programs and performance metrics for stock options. Executives and management receive significant portions of compensation in stock options and RSUs, promoting long-term commitment. [Source: Southern California Edison Annual Reports 2022-2024, p. 115]

Southern California Edison (SCE) has been proactive in updating its employee healthcare benefits in response to the evolving economic and political landscape. In 2022, SCE introduced new health insurance options that offer broader coverage and lower out-of-pocket costs for employees. This move was part of a larger strategy to ensure that their workforce remains healthy and productive amid rising healthcare costs and economic uncertainties. The company also expanded its wellness programs to include mental health resources, recognizing the growing importance of mental health in overall employee well-being. In 2023, SCE continued to enhance its healthcare benefits by partnering with local healthcare providers to offer more personalized care options and preventive health services. These changes were made to address the increasing demand for more comprehensive and accessible healthcare solutions in the current economic environment. Additionally, SCE's commitment to employee health is seen as a strategic investment, helping to reduce absenteeism and improve employee morale and productivity. By prioritizing healthcare, SCE is positioning itself to better navigate the economic and political challenges that impact both the company and its workforce.

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For more information you can reach the plan administrator for Southern California Edison at 2244 walnut grove ave Rosemead, CA 91770; or by calling them at 1-800-655-4555.

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