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

Avoiding the $500K+ RMD Shock: Essential Tips for Fortune Brands Home & Security Employees

Healthcare Provider Update: Healthcare Provider for Fortune Brands Home & Security: Fortune Brands Home & Security typically collaborates with major healthcare insurance providers to offer employee health coverage, but specific details regarding their healthcare contracts can vary. Common providers for companies of their size often include UnitedHealthcare, Aetna, and Cigna. Potential Healthcare Cost Increases in 2026: As 2026 approaches, healthcare costs are expected to surge significantly, driven by a confluence of factors. The impending expiration of enhanced federal premium subsidies under the Affordable Care Act could exacerbate financial strain, with many consumers facing potential out-of-pocket premium increases exceeding 75%. Simultaneously, the overall rise in medical expenses-fueled by inflation in hospital and prescription drug costs-will compound the situation, prompting insurers to propose steep premium hikes. With these challenges, individuals and families may find themselves navigating a precarious financial landscape regarding their healthcare options. Click here to learn more

'Managing Required Minimum Distributions (RMDs) is essential for Fortune Brands Home & Security employees looking to maximize their retirement savings, as thoughtful planning, such as Roth conversions and strategic early withdrawals, can reduce tax burdens and align with long-term retirement goals.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

'Fortune Brands Home & Security employees can significantly reduce the impact of RMDs on their tax obligations by exploring options like employer plan rollovers and Roth conversions, ensuring they effectively manage their retirement funds while minimizing unexpected tax consequences.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

The impact of required minimum distributions (RMDs) on retirees with sizable account balances.
Strategies for managing high RMDs, including Roth conversions, rollovers to employer plans, and early distributions.
The importance of tax planning to lessen the financial burden caused by RMDs for Fortune Brands Home & Security employees.

Mandatory yearly withdrawals from retirement accounts, including 401(k)s and IRAs, are known as required minimum distributions, or RMDs. The RMD can be a major financial hardship for retirees with sizable account balances, especially those above $500,000. This could result in higher tax obligations. Even while RMDs cannot be directly reduced, there are a number of tactics that can be used to minimize the financial burden they place on Fortune Brands Home & Security employees. Among these tactics are rollovers to employer plans, Roth conversions, and strategic distribution planning to capitalize on favorable tax brackets.

Important Takeaways:

- Greater account balances result in a higher RMD, which increases the tax obligation.
- Roth conversions and rollovers to employer plans are workable ways to lessen the burden of RMDs, even though they cannot be decreased.
- Future tax loads can be lessened by making larger distributions in years with lower incomes or by distributing money early, before the age of 73.

The Effects of Elevated RMDs:

Beginning on April 1st of the year following the account holder's 73rd birthday, RMDs must be taken. These payouts are determined using a life expectancy factor, which is impacted by the age and marital status of the account holder, rather than a set percentage. The amount that has to be withdrawn is calculated by applying the life expectancy factor to the year-end account balance from the prior year.

Simply divide your retirement account balance as of December 31 by the IRS life expectancy ratio to determine your RMD. It is evident that individuals with substantial balances, such as those above $500,000, will have to make larger withdrawals and possibly pay higher taxes because the required distribution increases with the account size.

Take, for example, a person who is 73 years old and has $600,000 in their IRA. Their life expectancy factor, according to the IRS Uniform Lifetime Table, would be 26.5. The RMD for the year would be $22,641.51 if the account amount were divided by this factor. This additional payout may cause the retiree to enter a higher tax bracket, depending on their other income sources, such as pensions, rental properties, or part-time employment.

Techniques for Handling High RMDs:

Although lowering the RMD directly is prohibited by IRS regulations, there are a number of ways to lessen the tax burden related to these distributions:

1. Roth Conversions : You can lower future RMDs by moving assets from a regular IRA to a Roth IRA. Once the money is in a Roth IRA, no RMDs are required for those assets, even though the conversion is taxable in the year it happens. For Fortune Brands Home & Security employees looking to reduce their retirement tax liability, this may be a beneficial long-term approach.

2. Rollover to an Employer Plan : Another choice if you are still employed with a Fortune Brands Home & Security company is to transfer your IRA funds into your employer's retirement plan. Financial advisors state that you have until April 1st of the year after your retirement to begin taking RMDs from your employer's plan. By delaying the RMD requirement, you can give your money additional time to grow tax-deferred.

3. Early Distributions : The total amount of the RMD in the future may be reduced if you take withdrawals from your retirement accounts before you become 73 or in years when your income is lower. You may be able to minimize the amount of future RMDs and the related tax effects by taking out more money in years when your tax bracket is lower.

4. Tax Planning : The impact of RMDs can be considerably lessened by carefully deciding when and how much to withdraw. You can lessen the chance of being forced into a higher tax bracket by a significant RMD and take advantage of favorable tax brackets by structuring withdrawals with the help of a financial advisor.

The Bottom Line:

RMDs are mandated by the IRS to ensure that retirement funds are finally taxed, preventing people from perpetually evading tax liabilities. However, Fortune Brands Home & Security employees with sizable account balances may have to make unforeseen, sizable withdrawals, which could raise their tax obligation. It's critical to comprehend how these distributions operate and make appropriate plans in order to prevent surprises when RMDs start.

In addition to offering advice on the best practices for managing RMDs, working with a financial advisor can help ensure that RMD deadlines are fulfilled. Fortune Brands Home & Security retirees can better match their financial plans with their long-term retirement objectives and keep their tax obligations under control by carefully planning, converting to a Roth, and making calculated withdrawals.

You should speak with a financial advisor if you have any questions about how your retirement accounts operate or when you need to take your RMDs. This advisor can guide you through the regulations pertaining to RMDs and help you create a plan that minimizes tax consequences and fits with your retirement objectives.

Delaying your first RMD until April 1 of the year after your 73rd birthday is one tactic retirees may want to think about. Because of this delay, people are able to take fewer distributions overall during the first year of RMDs, which may lessen their tax liability. Delaying the RMD, however, results in two distributions in the second year, which may cause retirees to be placed in a higher tax rate. In order to prevent unanticipated tax consequences, retirees should carefully arrange this delay, as the IRS discusses in Publication 590-B, 2023 (IRS, 2023).

Featured Video

Articles you may find interesting:

Sources:

1. White, Nicole. 'Avoiding the $500K+ RMD Shock: Essential Tips for Retirees.' Investopedia , 17 May 2025.

2. 'I’m 90, and the RMDs and Taxes on My $1.5 Million Are Huge. Is It Too Late for Roth Conversions Now?' MarketWatch , 14 May 2025.

3. Berntson, Katie, CFP®, and Stonich, Anne Marie, CFP®, CPA. 'Unlocking the Power of Roth Conversions for Long-Term Wealth Growth.' Coldstream Wealth Management , April 2025.

4. 'Financial Advisors Are Divided over This RMD Tax Strategy.' Yahoo Finance , May 2025.

5. 'Retirement Plans FAQs Regarding IRAs.' IRS , November 2024.

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

Fortune Brands Home & Security offers its employees both a pension plan and a 401(k) plan under the broader Fortune Brands Home & Security Retirement Savings Plan. This plan is a Defined Contribution Plan, allowing employees to participate in either a 401(k) or Profit-Sharing Plan. Fortune Brands Home & Security employees have access to a 401(k) Plan, where employee contributions are matched by the company at varying rates, depending on the employee's position and years of service (QDRO.com) (SimpleQDRO). The company offers automatic enrollment in the 401(k) plan, where employees are enrolled at a contribution rate of 3% of their salary. The contribution rate can increase by 1% annually until it reaches 6%, unless the employee opts out (SEC.gov). Additionally, Fortune Brands provides Profit-Sharing Contributions, which vary depending on the company division, and employees are vested in these contributions after three years of service. Employees who meet specific requirements, such as 10 years of service and attaining age 55, become fully vested in their 401(k) and profit-sharing accounts (SEC.gov). The vesting schedules for the pension and 401(k) plans depend on the employee’s years of service. Most employees achieve full vesting after three years of service, but for employees of divisions like Rohl and Fiberon, the vesting timeline can extend up to five years

News: In early 2024, Fortune Brands Home & Security announced a significant restructuring initiative aimed at streamlining operations and enhancing efficiency. The company revealed plans to reduce its workforce by approximately 5% as part of this strategic shift. Additionally, Fortune Brands is re-evaluating its employee benefits package, including potential changes to retirement plan offerings and adjustments to health benefits. Explanation: Given the current economic environment, where companies are reassessing their financial stability and operational efficiency, this news is crucial. Changes in employment and benefits could impact employees' financial planning, particularly in terms of retirement savings and healthcare costs. Understanding these adjustments is essential due to the broader economic and tax landscape, which could affect investment strategies and personal financial decisions.

Stock Options: FBHS provided stock options to key executives and senior management as part of their long-term incentive program. This was aimed at aligning the interests of executives with those of shareholders. RSUs: RSUs were granted to employees based on performance metrics and tenure. These units vest over a period of time, typically 3-4 years, contingent on continued employment and performance.

health benefits for Fortune Brands Home & Security. This will take some time to ensure accuracy and comprehensiveness. I’ll provide a summary once I have the details. In the meantime, if you have any specific aspects of their health benefits or recent employee healthcare news you're particularly interested in, please let me know!