Healthcare Provider Update: Verizon collaborates with Aetna as its primary healthcare provider, offering a range of health plans and services to its employees and their families. Looking ahead to 2026, the healthcare landscape is poised for significant change, as record hikes in Affordable Care Act (ACA) premiums are anticipated. With some states facing increases exceeding 60%, many individuals could see their out-of-pocket premiums rise by more than 75%, particularly if enhanced federal premium subsidies are not extended. This scenario could create an additional burden for Verizon employees, emphasizing the importance of strategic planning for healthcare coverage amidst such dramatic shifts in costs. Click here to learn more
“Verizon 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.
“Verizon 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 Verizon Employees
Many Verizon 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 Verizon 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
How does the Verizon Pension Plan facilitate retirement income for long-term employees, and what specific benefits can employees expect when enrolling in the retirement program provided by Verizon? What unique features does the Verizon Pension Plan offer compared to other retirement plans an employee might have encountered, and how can employees maximize the benefits of these features throughout their career at Verizon?
Verizon Pension Plan Benefits: Verizon's Pension Plan offers substantial benefits aimed at facilitating a secure retirement for long-term employees. Upon enrolling in the retirement program, employees can expect defined benefits that are based on their salary and years of service, ensuring a predictable and stable income after retirement. Unique to Verizon, compared to some other plans, may include options for early retirement under certain conditions and a choice between annuity payments or a lump-sum distribution upon retirement. Employees can maximize these features by planning for long-term service and considering their retirement income needs early in their careers.
In what ways can employees at Verizon strategize their rollover decisions when transitioning from the Verizon Pension Plan to other retirement savings plans upon leaving the company? What factors should be considered by Verizon employees to ensure they are making informed choices regarding rolling over funds to a traditional IRA or another qualified employer plan?
Rollover Strategies: When transitioning from the Verizon Pension Plan to other retirement savings options upon leaving the company, employees should strategize their rollover decisions carefully. Factors to consider include the tax implications, the investment options available in the rollover destination, and the timing of the transfer to avoid penalties. Verizon employees should evaluate the benefits of rolling over to a traditional IRA or another employer's plan, considering their future financial needs and retirement goals.
What are the implications of the recent IRS limits for 2024 concerning contributions to retirement plans for Verizon employees, and how does Verizon align its offerings with these federal regulations? Additionally, how can Verizon employees best take advantage of these limits to enhance their retirement savings while adhering to tax regulations?
IRS Contribution Limits: The implications of IRS limits for 2024 are critical for Verizon employees as these limits dictate how much can be contributed tax-deferred into retirement plans. Verizon aligns its offerings with these federal regulations by adjusting contribution limits in their plans accordingly. Employees are encouraged to maximize their contributions to take full advantage of tax-deferred growth, especially when IRS limits increase, thereby enhancing their retirement savings while adhering to tax regulations.
How does the special tax treatment for lump sum distributions from the Verizon Pension Plan affect employees who receive their benefits early or have specific circumstances, such as being born before 1936? What options do these employees have to manage their tax burden effectively, and how can they best navigate these complicated rules while planning for their retirement?
Tax Treatment of Lump Sum Distributions: The special tax treatment for lump sum distributions from the Verizon Pension Plan can significantly affect employees who opt to receive their benefits early or under specific circumstances like being born before 1936. These employees have options to manage their tax burden effectively by opting for ten-year averaging or capital gain treatment on eligible distributions, allowing for a potentially lower tax rate on their pension benefits.
For surviving spouses and alternate payees of Verizon employees, what are the specific benefits available under the Verizon Pension Plan? How do these benefits compare to those available to employees, and what steps must surviving spouses or alternate payees take to ensure they receive their entitled benefits without delays or complications?
Benefits for Surviving Spouses and Alternate Payees: For surviving spouses and alternate payees, the Verizon Pension Plan offers benefits similar to those available to employees, such as annuity payments or lump-sum options. These beneficiaries must take certain steps to ensure they receive their benefits without delays, such as providing necessary documentation and adhering to plan rules. The plan details and processes for claiming benefits should be clearly understood to avoid complications.
How can Verizon employees utilize the resources available through the Verizon Benefits Center to better understand and manage their retirement benefits? What specific tools and services does the Benefits Center provide, and how can these resources assist employees in making informed decisions regarding their pension plan options?
Utilizing Resources at the Verizon Benefits Center: Verizon employees can utilize various tools and services provided by the Verizon Benefits Center to manage and understand their retirement benefits. The Benefits Center offers personalized consultations, detailed plan documentation, and tools for estimating pension benefits and planning retirement income, assisting employees in making informed decisions about their pension plan options.
What challenges might Verizon employees face regarding eligibility and tax withholding when receiving their pension payments, and how can they mitigate these issues? It's crucial for employees to understand the mechanics of eligibility regarding rollovers and payment processing; what key pieces of information should they be aware of to avoid unexpected taxes?
Challenges in Eligibility and Tax Withholding: Verizon employees might face challenges regarding eligibility and tax withholding when receiving pension payments. Understanding the plan's criteria for eligibility, the implications of rollovers, and the impact of mandatory withholding on distributions is crucial. Employees can mitigate these issues by consulting with the Verizon Benefits Center or a tax advisor to ensure compliance and avoid unexpected taxes.
What is the process for Verizon employees wishing to initiate a direct rollover from the Verizon Pension Plan, and what documentation will they need to prepare? Can employees receive assistance from the Verizon Benefits Center during this process, and how does using a direct rollover benefit them compared to other forms of payment?
Direct Rollover Process: The process for initiating a direct rollover involves deciding the destination of the rollover (traditional IRA or another employer plan), completing necessary documentation, and potentially seeking assistance from the Verizon Benefits Center. A direct rollover helps in avoiding immediate taxes and maintaining the tax-deferred status of retirement savings.
In terms of retirement preparedness, how does the pension plan at Verizon accommodate employees’ needs for financial security in their senior years? What additional education or resources does Verizon provide to assure that employees fully understand their retirement options and the importance of planning ahead?
Retirement Preparedness: Verizon's pension plan is designed to accommodate the financial security needs of employees in their senior years. In addition to the pension benefits, Verizon provides educational resources and planning tools to ensure employees understand their retirement options and the importance of early and consistent retirement planning.
How can employees reach out to the Verizon Benefits Center for further information about the pension plan and other retirement benefits? What specific contact methods are available to employees, and how can these interactions enhance their understanding and management of retirement benefits provided by Verizon?
Contacting the Verizon Benefits Center: Verizon employees seeking more information about their pension plan and other retirement benefits can reach out to the Verizon Benefits Center through various contact methods such as phone, email, or online portals. These interactions are crucial for enhancing understanding and effective management of retirement benefits, ensuring employees make the most of the benefits available to them.
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