Common 401(k) Rollover Errors Aetna Employees Should Avoid

Healthcare Provider Update: Healthcare Provider Information for Aetna Aetna, part of the CVS Health family, has been a key player in the Affordable Care Act (ACA) marketplace, providing health insurance plans to individuals and families. However, significant changes are on the horizon for 2026, as Aetna will exit the ACA marketplace in 17 states, impacting approximately 1 million members. This withdrawal is attributed to the company's challenges in maintaining competitiveness and providing value in a rapidly evolving healthcare landscape. Potential Healthcare Cost Increases in 2026 As the healthcare landscape shifts, substantial premium hikes are anticipated for those enrolled in ACA marketplace plans, with projections of up to 75% increases in out-of-pocket costs due to the potential loss of enhanced federal subsidies. In some states, insurers have filed for rate increases exceeding 60%, driven by surging medical costs and the expiration of premium tax credits established under the American Rescue Plan. For Aetna's former members, this change further complicates their healthcare landscape as they seek new insurance options amid heightened financial pressures. Click here to learn more

'Aetna employees often face complex rollover decisions that can affect their retirement outcomes. To help avoid unnecessary taxes or penalties, it's important to understand rules like the 60-day window, the Rule of 55, and NUA strategies before moving assets.' — Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

'Aetna employees transitioning from their company plans need to understand rollover details such as timing, tax treatment, and NUA opportunities to help preserve long-term retirement value.' — Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

1. Common rollover mistakes that can trigger taxes and penalties.

2. Special rules like the “Rule of 55” that can help early retirees.

3. How Aetna employees who own company stock can realize tax advantages through Net Unrealized Appreciation (NUA).

By Brent Wolf, CFP®, Wealth Enhancement

Transferring retirement savings from a 401(k) to an IRA can offer greater investment flexibility and control, but missteps during this process could lead to unnecessary taxes, penalties, or lost opportunities for growth. Thoughtful planning and awareness of the rules can help Aetna employees steer clear of these costly mistakes.

1. Missing the 60-Day Rollover Window

When leaving a company like Aetna, you may decide to move your 401(k) into an individual retirement account (IRA). There are two ways to move your funds: through a direct transfer or a 60-day rollover.

With a direct transfer, your 401(k) provider sends the funds directly to your IRA with no tax withheld. However, if you receive a check instead, you must deposit that amount into your IRA within 60 days. Missing that deadline can result in taxes being due and, if you’re under age 59½, a 10% early withdrawal penalty.

Additionally, your plan administrator may withhold up to 20% for federal taxes. For example, if you’re rolling over $10,000, you might receive only $8,000. To avoid tax on the withheld portion, you must deposit the full $10,000 into your IRA within 60 days—using other funds to cover the $2,000 difference until you’re refunded at tax time.

2. Overlooking the Rule of 55

Employees who leave Aetna during or after the year they turn 55 may be able to use the “Rule of 55” to withdraw money from their 401(k) without the 10% early-withdrawal penalty (although ordinary income tax still applies).

This exception applies only to the 401(k) tied to the employer you just left—not to IRAs. If you roll your 401(k) into an IRA, that benefit is forfeited and the standard age-59½ rule applies. For public safety workers, the qualifying age may be as early as 50.

3. Missing Out on Aetna Stock Tax Advantages

If you hold Aetna company stock inside your 401(k), you may be able to use the Net Unrealized Appreciation (NUA) strategy. With NUA you move company stock directly from your 401(k) into a taxable brokerage account, paying ordinary income tax on the original cost basis only. The appreciated portion is then subject to long-term capital gains tax when sold—typically a lower rate.

For example, if your company stock cost basis was $300,000 and it has grown to $3 million, only $300,000 is taxed as ordinary income when distributed; the $2.7 million in growth is taxed later at long-term capital gains rates.

However, if you roll that stock into an IRA through a direct rollover, you lose the NUA benefit—all future withdrawals would be taxed as ordinary income.

Plan Thoughtfully and Seek Guidance

Even seasoned investors can miss key details of a 401(k) rollover. Aetna employees nearing retirement may benefit from professional guidance to navigate complex tax rules, refine rollover strategies, and make informed decisions about their pension and savings.

The Retirement Group helps corporate professionals address retirement transitions and rollovers. To discuss your options, call (800) 900-5867 to speak with an advisor familiar with Aetna benefits and retirement programs.

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Sources:

• 1. Adams, Hayden. “When Can You Withdraw? 401(k)s and the Rule of 55.”  Charles Schwab , 1 Apr. 2025,  www.schwab.com/learn/story/retiring-early-5-key-points-about-rule-55 . Accessed 17 Nov. 2025.

• 2. Ellis, Donna. “401(k) Rollover Rules: How to Avoid Costly Mistakes.”  Creative Planning , 5 Nov. 2025, creativeplanning.com/insights/financial-planning/401k-rollover-rules-avoid-costly-mistakes/. Accessed 17 Nov. 2025.

• 3. Hayes, Adam, Ph.D., CFA. “Net Unrealized Appreciation (NUA): Definition and Tax Treatment.”  Investopedia , 14 May 2025,  www.investopedia.com/terms/n/netunrealizedappreciation.asp . Accessed 17 Nov. 2025.