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Healthcare Provider Update: FedEx's healthcare provider is primarily Cigna, which partners with the company to offer health insurance solutions to its employees through a range of plans, including High Deductible Health Plans paired with Health Savings Accounts. In 2026, FedEx employees may face significant healthcare cost increases, mirroring a broader trend across the nation. With the expected elimination of enhanced ACA premium subsidies, some workers could see their out-of-pocket premium costs surge by over 75%. Coupled with the anticipated double-digit rate hikes from major insurers and rising medical expenses, the financial burden on employees is poised to escalate sharply, potentially impacting their overall healthcare affordability. Click here to learn more
“FedEx employees who take the time to understand evolving IRA contribution limits, spousal opportunities, and conversion rules are often better positioned to coordinate personal savings with workplace retirement benefits. I encourage individuals to review these strategies within the context of their broader retirement and estate planning goals while consulting a qualified tax advisor for guidance tailored to their specific situation.” – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
“FedEx employees who carefully evaluate IRA contribution limits, spousal strategies, and conversion considerations can create stronger alignment between their personal savings and employer-sponsored benefits. I encourage individuals to view these IRA decisions as part of a coordinated retirement and estate planning framework while consulting a qualified tax professional for guidance specific to their circumstances.” – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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Key IRA contribution rules and annual limits for 2026.
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Strategic considerations such as spousal IRAs, SEP IRAs, and Roth conversions.
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Special IRA situations involving alimony, children with earned income, and income phase-outs.
Seven Frequently Ignored Facts About IRAs for FedEx Employees
Many FedEx employees begin thinking about IRA contributions while completing their tax forms and reviewing potential deductions. Whether you participate in company-sponsored retirement benefits or contribute independently, understanding how IRAs fit into your overall strategy can help you evaluate additional planning opportunities.
You might be unaware of a few things regarding IRAs. These are seven facts that are frequently forgotten.
1. An IRA Can Be Opened and Funded by a Nonworking Spouse
A spouse who does not receive a salary can still save for retirement. If you file a joint federal income tax return and one spouse earns taxable compensation, the nonworking spouse can open and contribute to their own traditional or Roth IRA. 1
The deductible amount of a traditional IRA contribution may be limited based on income if the working spouse participates in an employer-sponsored retirement plan.
The total annual contribution cap for Roth and traditional IRAs in 2026 is $7,500. A catch-up contribution of $1,100 is permitted for individuals age 50 and older. 1
Combined IRA contributions for both spouses cannot exceed the taxable income reported on the joint return.
2. You Can Still Contribute Even If You Are Not Eligible for a Deduction
Your traditional IRA contribution may not be deductible if your modified adjusted gross income exceeds certain thresholds and you participate in a company retirement plan such as a 401(k) or 403(b). 2
However, nondeductible contributions may still allow earnings to grow on a tax-deferred basis until withdrawal. 2
Assets from a traditional IRA may also be converted to a Roth IRA. 3 Conversions are permitted regardless of income level, although income taxes may apply depending on the amount converted.
3. Alimony May Not Count as Taxable Compensation for IRA Contributions
Under the Tax Cuts and Jobs Act of 2017, alimony payments from divorce or separation agreements signed on or after January 1, 2019 are not deductible to the payer and are not taxable income to the recipient. 4
Because IRA contributions must be based on taxable compensation, post-2018 alimony typically does not qualify.
Agreements signed before January 1, 2019 are generally grandfathered under prior rules unless formally modified.
4. Self-Employed? Consider a SEP IRA
If you have consulting income, freelance work, or a side business, you may be eligible to establish a Simplified Employee Pension (SEP) IRA.
SEP IRA contributions are generally made by the employer and may qualify as business deductions. Contribution limits are substantially higher than traditional or Roth IRAs.
Self-employed individuals may contribute up to 25% of qualified compensation, subject to IRS calculation guidelines. IRS Publication 560 includes worksheets for determining limits.
To make contributions for a given tax year, a SEP IRA typically must be established by the tax filing deadline, including extensions.
5. Catch-Up Contributions for Individuals Over Age 50
Individuals age 50 or older may make additional catch-up contributions to a traditional or Roth IRA.
The catch-up amount for 2026 is $1,100, with future adjustments indexed for inflation.
6. A Child Can Contribute to a Roth IRA if They Have Earned Income
A minor with taxable earned income may contribute to a Roth IRA up to the annual limit or the amount of earned income for the year, whichever is less.
Qualified retirement accounts such as IRAs are generally not counted as assets for purposes of determining the Student Aid Index (SAI) on the Free Application for Federal Student Aid (FAFSA), although withdrawals may affect income calculations. 5
7. You May Still Access Roth IRA Benefits Even if You Exceed Income Limits
A Roth IRA offers potential advantages such as tax-free qualified withdrawals and no required minimum distributions for the original account holder.
Although income limits restrict direct Roth IRA contributions, individuals may convert assets from a traditional IRA to a Roth IRA regardless of income.
IRS pro-rata rules require that all traditional, SEP, and SIMPLE IRA balances be considered when determining the taxable amount. Accurate tracking of after-tax contributions requires proper reporting, including Form 8606.
Because conversion strategies can involve complex tax considerations, reviewing your personal situation with a qualified tax professional may be helpful.
Support for Your Retirement Planning
For FedEx employees evaluating how IRAs coordinate with workplace retirement benefits, understanding contribution limits, conversion rules, and spousal planning opportunities can play an important role in a broader retirement strategy.
The Retirement Group can assist you in evaluating how these IRA rules align with your long-term goals. If you have questions about retirement planning, you can speak with a representative by calling (800) 900-5867 .
Disclosure: Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.
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Sources:
1. 'Retirement topics - IRA contribution limits.' IRS, 3 Mar. 2026. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits
2. “IRA Contribution Limits for 2025 and 2026.” Fidelity Learn, Fidelity Investments, 26 Jan. 2026, www.fidelity.com/learning-center/smart-money/ira-contribution-limits .
3. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily
include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a
Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required
minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. Investing involves
risk, including possible loss of principal.
4. 'Divorce or separation may have an effect on taxes,' IRS Tax Reform Tax Tip, July 8, 2019. https://www.irs.gov/newsroom/divorce-or-separation-may-have-an-effect-on-taxes
5. 'How 6 Different Assets Can Affect Your FAFSA and Financial Aid Eligibility.' Saving for College, by Jeffrey Trull. Jan. 15, 2026. https://www.savingforcollege.com/article/how-7-different-assets-can-affect-your-financial-aid-eligibility
What are the implications of the Funding Target Attainment Percentage for FedEx Corporation employees, and how does it impact the security of the pension benefits offered by FedEx Corporation? This question seeks to explore the nuances of the funding target attainment percentage as reported in the annual funding notice, examining how this metric not only reflects the financial health of FedEx Corporation's pension plan but also how it affects employee confidence in future benefit payments and retirement planning.
Funding Target Attainment Percentage: The Funding Target Attainment Percentage for FedEx Corporation indicates the degree to which the pension plan is funded. A percentage of 101.33% for 2022 suggests that the plan has sufficient assets to cover its liabilities, providing security for employees' pension benefits. This high percentage likely increases employee confidence in the stability and reliability of their future pension payouts, essential for long-term retirement planning.
How does the merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan influence the benefits currently available to FedEx Corporation employees? This question aims to delve into the practical changes that may arise due to this merger, assessing whether it aligns with employee expectations regarding their pension benefits and how the transition process is managed by FedEx Corporation.
Merger of Pension Plans: The merger of the FedEx Freight Pension Plan into the FedEx Corporate Employees’ Pension Plan appears to have been strategically managed to maintain benefit stability. Despite increasing liabilities by 5.3%, the merger was structured to ensure no negative impact on the benefit amounts payable to participants from either plan, preserving the expected pension benefits for all affected FedEx Corporation employees.
In terms of investment strategies, what measures does FedEx Corporation implement to ensure that its pension plan investments align with the long-term liabilities expected to be paid out to retirees? This question encourages an exploration of the investment policies in place, examining the asset allocations and risk management strategies that FedEx Corporation employs to ensure sustainable funding for its pension obligations, which could potentially include detailed analyses of stocks, debts, and alternative investments.
Investment Strategies: FedEx Corporation employs a diversified investment strategy across equities, fixed income, and alternative investments, aiming to meet long-term pension liabilities. This approach, which includes both active management strategies and the limited use of derivatives, is designed to generate returns that exceed market indices, thus ensuring adequate funding of pension obligations.
What options do employees of FedEx Corporation have for accessing their pension plan statements, and how frequently are these statements generated? The focus here is to understand the communication strategies employed by FedEx Corporation regarding pension benefit statements, including technological access points and the importance of these documents for employee financial planning.
Pension Plan Statements: FedEx Corporation provides annual pension plan statements through their Retirement Service Center, available electronically each fall. Employees can access their statements online or request them if notifications are not received, ensuring transparency and aiding in personal financial planning.
How are contributions to the FedEx Corporation Employees’ Pension Plan determined, and what role do excess contributions play in the plan's overall funding strategy? This question aims to educate employees about how the company balances mandatory contribution levels with potential excess contributions, exploring how these factors interact to influence the plan's solvency and employee benefits.
Contributions to the Pension Plan: Contributions to the FedEx Corporation Employees' Pension Plan are calculated to meet at least the minimum legal requirement and potentially include voluntary excess contributions. These excess contributions can help manage the plan's funding level and ensure its solvency, benefiting overall pension security for employees.
What types of benefits are guaranteed under the Pension Benefit Guaranty Corporation (PBGC) for FedEx Corporation employees, and what limitations exist that employees should be aware of? By focusing on the guaranteed benefits, this question prompts a discussion on the security of specific benefits provided by FedEx Corporation and highlights limitations, allowing employees to understand their rights fully.
PBGC Guarantee: The Pension Benefit Guaranty Corporation guarantees certain types of benefits for FedEx Corporation employees, such as pension benefits at normal retirement age and most early retirement benefits. However, there are limitations, such as exclusions for benefits without vested rights and recently increased benefits, which employees should be aware of to fully understand their pension security.
In what ways does the FedEx Corporation plan to adjust its pension funding strategy in light of changing federal laws that impact pension obligations? Employees are encouraged to consider how legislative changes influence corporate policies surrounding retirement benefits and the proactive strategies FedEx Corporation might take to remain compliant while ensuring the security of employee pensions.
Adjustments to Funding Strategy: FedEx Corporation is likely to adjust its pension funding strategy in response to legislative changes affecting pension obligations, such as those introduced by recent acts adjusting how pension liabilities are calculated. This proactive approach aims to ensure compliance with new laws while continuing to secure the financial health of the pension plan.
What are the steps that FedEx Corporation employees must take if they are considering retirement, particularly in how to navigate the pension plan and gain access to their benefits? This question aims to provide clarity on the retirement process, ensuring that employees are equipped with the necessary information regarding required documentation, timelines, and points of contact within FedEx Corporation.
Steps for Retirement Planning: Employees considering retirement should contact the FedEx Retirement Service Center to navigate their pension plan benefits. This process involves understanding necessary documentation, timelines, and available support, facilitating a smooth transition into retirement.
How does FedEx Corporation plan to manage potential funding shortfalls in the pension plan, and what mechanisms are in place for notifying plan participants should such an event occur? Employees would need to understand the proactive measures put in place by FedEx Corporation to address funding-related challenges while also knowing what this means for their benefits.
Managing Funding Shortfalls: In the event of potential funding shortfalls, FedEx Corporation has policies in place to manage such situations, including strategic contributions to mitigate shortfalls. The company maintains transparency with plan participants about funding levels and any significant changes affecting the pension plan.
For those seeking more information about their pensions and retirement options, how can FedEx Corporation employees contact relevant departments, and what resources are available for assistance? This question provides an opportunity for employees to familiarize themselves with contact points such as the FedEx Retirement Service Center, emphasizing the importance of open communication channels for addressing inquiries related to their pensions. Feel free to consult the provided document for more in-depth exploration of these topics.
Contacting for Pension Information: FedEx Corporation employees seeking more information about their pensions or retirement options can contact the FedEx Retirement Service Center. This center provides essential resources and support, ensuring employees have access to all necessary information regarding their retirement planning.
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