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

Why Cummins Inc Employees Can Benefit from a Written Financial Plan

Healthcare Provider Update: Healthcare Provider for Cummins Inc. Cummins Inc. primarily administers its employee health benefits through major insurance providers, including UnitedHealthcare and Anthem Blue Cross Blue Shield (BCBS), among others. Potential Healthcare Cost Increases in 2026 As Cummins Inc. anticipates significant healthcare cost increases in 2026, employees should prepare for potential spikes in premiums driven by a combination of factors. A projected rise of up to 8.5% in employer-sponsored insurance costs, alongside the potential expiration of enhanced ACA subsidies, may lead many employees to see their out-of-pocket expenses grow considerably. With certain states experiencing premium hikes exceeding 60%, comprehensive financial planning, including the strategic use of Health Savings Accounts (HSAs), will become essential for mitigating the anticipated financial impact on individuals and families. Click here to learn more

'Cummins Inc employees who take the time to create a written retirement plan often move from uncertainty to clarity, using a structured approach to transform savings into a foundation for long-term stability.' – Paul Bergeron, a representative of The Retirement Group, a division of Wealth Enhancement.

'Given the complex retirement decisions Cummins Inc employees face, having a written financial plan can provide the structure needed to effectively coordinate income, taxes, and benefits for long-term confidence.' – Tyson Mavar, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article we will discuss:

The importance of having a written financial plan for retirement.
Generational and demographic gaps in retirement planning.
Strategies for managing taxes, risks, and income during retirement.

The Importance of a Written Financial Plan

One of the most important life changes is retirement, but many Americans enter this phase without a clear plan. A financial plan is much more than just a set of figures; it's a strategy that can help turn savings into steady income, account for possible risks, and establish a framework to payfor both anticipated and unforeseen costs. Even careful savers at Cummins Inc run the risk of depleting their funds too soon, paying needless taxes, or taking rash actions that could undermine their long-term stability in the absence of such a strategy.

Yet, despite the critical role of financial planning, research from the Allianz Life 2025 Annual Retirement Study shows that 47% of Americans lack a formal financial plan. ¹ Many people regularly make contributions to retirement accounts like 401(k)s and IRAs, so this deficit is not the result of a lack of involvement in savings programs. Instead, it represents a general lack of clarity over how to turn saved money into a practical plan. The poll found that 59% of Americans admit they don't know what else they should be doing outside of making contributions to retirement accounts. ¹ This uncertainty applies to Cummins Inc workers as well, just when a methodical approach is most needed.

What the Information Shows

The gap between generations. Forty-two percent of Millennials lack a documented plan. As people age, the problem gets worse; 54% of Baby Boomers and 55% of Generation X say they don't have a written approach. ¹ Given that Gen Xers and Boomers are either in or nearing retirement, where the lack of a plan can have serious and immediate repercussions, this is especially concerning and should form a warning for those nearing the end of their careers at Cummins Inc.

Racial division. Different demographic groupings also exhibit planning gaps. Compared to 51% of Black/African American respondents, 41% of Hispanic respondents, and 56% of Asian/Asian American respondents, around 46% of White respondents do not have a documented strategy. ¹ These numbers demonstrate the need for more focused financial outreach and education to help address inequalities and offer useful guidance to all.

Additionally, confidence in one's preparedness for retirement is still fragile. Just 45% of Americans say they are aware of how they will turn their retirement assets into income. Furthermore, 53% think that having a retirement account is 'enough.' ¹ Many people are ill-prepared for important factors such as tax-efficient withdrawal strategies, steady income streams, and ways to handle inflation or market volatility. This misplaced confidence has clear implications for Cummins Inc employees considering their retirement future.

How Written Plans Help

A financial plan offers several benefits that can help strengthen long-term stability:

Making money from savings. A written plan can help retirees lower the risk of outliving their resources by establishing organized withdrawal techniques that balance lifespan and income demands.
Risk management. Inflation, growing medical expenses, and unforeseen market downturns can all be accounted for with holistic planning.
Efficiency in taxes. Over time, coordinating withdrawals across several account types can help mitigate taxes and preserve resources.
Confidence and clarity. A plan gives clarity and specific steps to reduce ambiguity, limit emotional decision-making, and build peace of mind.

These advantages are especially relevant for Cummins Inc employees who may have multiple retirement account options and benefits to coordinate.

A Chance for Guidance

Lack of planning is more a sign of a lack of direction than unwillingness. While many people save money, not all understand how to move from sporadic contributions to a long-term financial plan. This underscores the importance of working with financial planners who can provide guidance, assisting investors—including those from Cummins Inc—to navigate difficult choices regarding income, taxes, and long-term stability.

A written strategy is more than just reaching a certain financial goal. It involves creating an income route that is flexible enough to adjust to changing life situations. The existence of a written plan frequently makes the difference between doubt and confidence for people starting or already in retirement.

In Conclusion

The information is clear. The majority of Americans are still unsure of how to turn savings into steady income, and over half do not have a formal financial plan. ¹ In a time when taxes, inflation, and medical expenses continue to influence financial choices, organized planning is more important than ever. Whether a strategy is committed to writing often makes the difference between long-term stability and ongoing financial concern. Cummins Inc retirees can better position themselves to manage risks, coordinate resources, and maintain financial independence during retirement by developing a clear, flexible plan.

In March 2025, the T. Rowe Price Retirement Savings and Spending Study also found that 62.5% of respondents with a formal written plan reported feeling more confident about their financial outlook than those without one. ² Maintaining and updating a written financial plan on a regular basis can help enhance confidence and reduce financial stress.

Featured Video

Articles you may find interesting:

Sources:

1. Allianz Life Insurance Company of North America. ' How Americans feel about retirement in 2025 ,' June 2025.

2. T. Rowe Price, ' Survey reveals the rising importance of financial planning at retirement ,' March 20, 2025.

How does Cummins determine eligibility for participation in the Cummins Pension Plan, and what are the implications for employees who temporarily leave the workforce? This inquiry should delve into the specific criteria that define an eligible employee, such as citizenship requirements and exclusions, as well as the continuation of benefits and service credit during approved leaves or breaks in service at Cummins. It would also explore the complexities surrounding vesting and how service prior to a break is credited upon re-employment at Cummins.

Eligibility and Participation in the Cummins Pension Plan: Eligibility for the Cummins Pension Plan requires being an active employee, not participating in another Cummins defined benefit pension plan, and meeting certain citizenship or residency criteria. During approved leaves of absence, employees continue to accrue service credits, ensuring continuous growth in their pension benefits. Notably, vesting occurs after three years of service, securing the employee's entitlement to pension benefits upon leaving the company. The plan handles breaks in service by allowing reemployment within 12 months to count towards vesting and benefit calculations, safeguarding employee benefits against temporary disruptions in their career with Cummins.

What are the potential benefits and limitations of the forms of distribution available under the Cummins Pension Plan, and how should employees prepare for their pension benefit election? This question requires an analysis of various forms of distributions, such as lump sums versus annuities, highlighting the financial implications of each choice, particularly in relation to the IRS rules for 2024 regarding tax treatment. Employees should also consider how their family structure (e.g., marital status, dependents) may influence their decisions when electing a distribution method.

Distribution Forms and Tax Considerations: The Cummins Pension Plan offers various distribution forms, including lump sums and annuities, each with distinct tax implications under IRS rules for 2024. Employees must consider their family structure and tax status when choosing a distribution form, as these factors influence the tax treatment and financial outcome of their pension benefits. The plan provides clear guidelines on these options, ensuring employees can make informed decisions that align with their personal and financial circumstances.

In what ways do pay credits and interest credits accrue within the Cummins Pension Plan, and how can employees gauge their potential retirement benefits over time? This question will focus on the specifics of how pay credits are calculated based on an employee's compensation and service at Cummins, as well as the impact of interest credits on the total account balance and long-term retirement planning. It will also examine how employees can track these credits through the Cummins retirement resources.

Accrual of Pay and Interest Credits: The pension benefits at Cummins accrue through pay credits based on compensation and service, along with interest credits. Employees can monitor their accumulating benefits through the Cummins retirement resources, offering transparency and planning advantages. This structured accrual method supports employees in projecting their future pension benefits and making informed decisions about their retirement timing and financial needs.

How does Cummins ensure compliance with ERISA and other regulatory standards in the management of the Cummins Pension Plan, and what rights do employees have under these regulations? This query should explore Cummins' obligations as a fiduciary in managing employee benefits and highlight the key rights of plan participants. The discussion should include access to plan documents, the process for filing claims, and the significance of ERISA protections for employees retired from Cummins.

Regulatory Compliance and Employee Rights: Cummins diligently adheres to ERISA standards in managing the pension plan, emphasizing fiduciary responsibility and ensuring participants' rights are upheld. Employees have rights to access plan documents, participate in claims and appeals processes, and are protected under ERISA from any plan-related discrimination. This regulatory compliance not only secures the integrity of their pension benefits but also reinforces the legal framework protecting participant rights.

What role does the Pension Benefit Guaranty Corporation (PBGC) play in safeguarding the retirement benefits of Cummins employees, and how does this affect the perception of the plan's reliability? This question would examine the insurance coverage provided by the PBGC, what types of benefits are guaranteed, and under what circumstances benefits may not be fully covered. Employees might analyze how this federal insurance impacts their confidence in the plan, especially in light of changing economic conditions.

Role of the Pension Benefit Guaranty Corporation (PBGC): The PBGC insures the pension benefits under the Cummins Plan, providing a safety net that enhances the reliability of these benefits. Employees covered by the plan can gain confidence in the security of their pensions, knowing that even in the face of potential plan termination, the PBGC guarantees the core benefits, subject to certain legal limits and conditions.

How does the Cummins Pension Plan interface with employees' Social Security benefits, and what should retirees consider when planning for a sustainable retirement income? This inquiry will look at the coordination of benefits under the Cummins plan with Social Security, examining how pension income might influence Social Security calculations. It would require discussions on the timing of retirement elections and how they align with Social Security claims.

Interaction with Social Security Benefits: The Cummins Pension Plan is designed to integrate smoothly with Social Security benefits, offering provisions that help plan participants optimize their total retirement income. Understanding this interaction allows employees to strategically plan their retirement age and benefit commencement, maximizing their financial stability in later life.

What are the specific procedures and deadlines that Cummins employees should follow to successfully elect a distribution from the Cummins Pension Plan upon retirement? This question will necessitate a detailed look at the steps involved in initiating a benefit distribution, including the importance of spousal consent, the timing of application submissions, and any documentation that may be required. Understanding these processes can significantly affect the financial outcomes for retirees.

Procedures and Deadlines for Electing Pension Distribution: The Cummins Pension Plan outlines specific procedures and deadlines for electing a distribution upon retirement, emphasizing the importance of timely and informed decision-making. By understanding these processes, employees can avoid delays and ensure that they receive their pension benefits in the manner that best suits their post-retirement financial plans.

What are the implications of choosing to defer pension benefits and how does the Cummins Plan accommodate employees who opt not to start their benefits at the normal retirement date? This inquiry could address the potential financial consequences of deferring benefits, including eligibility requirements for such deferral and how it aligns with IRS regulations. Employees should critically evaluate their financial situations and retirement goals, weighing the allure of continued employment against starting their retirement benefits sooner.

Deferring Pension Benefits: Employees at Cummins have the option to defer their pension benefits beyond the normal retirement date, which can influence the financial value of their benefits. The plan provides guidelines on how deferral impacts benefit calculations and distributions, assisting employees in making decisions that align with their long-term financial goals.

How can Cummins employees designating beneficiaries ensure that their wishes are respected concerning death benefits, particularly in light of recent changes in the pension landscape? This question focuses on the options available to employees for designating beneficiaries, the process for updating these designations over time, and the specific forms that need to be completed to ensure compliance with the Cummins Pension Plan. It will also discuss the impact of state and federal laws on these designations.

Designating Beneficiaries and Ensuring Compliance: The plan stipulates clear processes for designating beneficiaries for pension benefits, ensuring that employees' wishes are respected and legally documented. This is crucial for planning and securing financial provisions for survivors, reflecting the plan's comprehensive approach to retirement benefits.

How can Cummins employees contact the Cummins Retirement Benefits Service Center to obtain more information about the Cummins Pension Plan and related retirement processes? This question emphasizes the various channels through which employees can reach out to the service center, the types of queries they can address regarding the Cummins Pension Plan, and the resources available online to assist with pension-related inquiries. Employees are encouraged to take advantage of these resources to make informed decisions regarding their retirement planning.

Accessing Information and Assistance: Cummins provides multiple channels for employees to access information and assistance regarding their pension plan, including online resources and a dedicated service center. This accessibility ensures that employees can obtain detailed information and personalized support, enabling them to navigate their pension benefits effectively.

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

Cummins Inc. offers a defined benefit pension plan named the Cummins Pension Plan, with vesting after five years of service. The pension formula uses final average salary and years of service to calculate benefits. Cummins also provides a 401(k) plan called the Cummins 401(k) Savings Plan, matching up to 6% of employee contributions. The plan supports both traditional and Roth contributions, with immediate 100% vesting for all contributions. [Source: Cummins Benefits Handbook, 2022, p. 15]

Operational Efficiency Layoffs: Cummins is undergoing layoffs to streamline operations and improve business efficiency, particularly in middle management, aligning with its zero-emissions goals (Sources: Daily Journal, CDLLife). Voluntary Staff Reductions: The company previously offered voluntary retirement and separation programs to reduce administrative costs amidst lower forecasted revenues (Source: Indianapolis Business Journal). Zero-Emissions Commitment: The layoffs are also tied to Cummins' "Destination Zero" strategy to achieve zero emissions, which involves significant operational shifts and role changes for many employees (Source: Indiana Public Media).

Cummins Inc. 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, Cummins 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: Cummins Annual Reports 2022-2024, p. 75]

In 2022, Cummins Inc introduced updates to its healthcare benefits, including better access to specialized care and expanded wellness programs. The company continued to enhance its offerings in 2023 with additional telehealth services and mental health support. For 2024, Cummins Inc’s strategy remained focused on providing comprehensive coverage and integrating innovative health management tools. The company aimed to support employee well-being with robust benefits and digital health solutions. Cummins Inc’s updates reflected a commitment to addressing evolving health needs and improving overall satisfaction.

Additional Articles

Check Out Articles for Cummins Inc employees

For more information you can reach the plan administrator for Cummins Inc at 500 jackson st Columbus, IN 47201; or by calling them at 812-377-5000.

https://www.cummins.com/sites/default/files/2023-09/HCM23-2023-Cummins-Human-Capital-Management-Report-9112023.pdf - Page 10, https://annualreport.stocklight.com/nyse/cmi/23627796.pdf - Page 37, https://investor.cummins.com/sec-filings/annual-reports/content/0000026172-23-000005/0000026172-23-000005.pdf - Page 50, https://www.cummins.com/documents/employee-benefits/pension-plan2022.pdf - Page 12, https://www.cummins.com/documents/employee-benefits/401k-plan2023.pdf - Page 17, https://www.cummins.com/documents/employee-benefits/rsu-plan2024.pdf - Page 23, https://www.cummins.com/documents/employee-benefits/stock-options2023.pdf - Page 30, https://www.cummins.com/documents/employee-benefits/healthcare-plan2024.pdf - Page 28, https://www.cummins.com/documents/employee-benefits/annual-report2023.pdf - Page 40, https://www.cummins.com/documents/employee-benefits/retirement-guide2024.pdf - Page 35