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
'Rising costs, evolving property tax rules, and liquidity pressures mean that investors should consider Los Angeles real estate as part of their larger retirement and estate strategy, rather than as a standalone asset. I encourage FedEx employees to regularly reassess how home ownership aligns with long-term cash flow, legacy goals, and overall financial flexibility.' – Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement.
'In today’s Los Angeles housing environment, FedEx employees should evaluate real estate through the lens of liquidity, long-term risk, and generational planning rather than relying solely on past appreciation. Thoughtful coordination between housing decisions and retirement objectives can create greater clarity and flexibility.' – Brent Wolf, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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How rising costs and shifting market conditions have changed the financial landscape for Los Angeles homeowners.
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What today’s inheritance and property tax rules mean for families passing real estate to the next generation.
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How liquidity, insurance, and long-term planning may influence real estate decisions for FedEx employees.
Owning a home in California, particularly in Los Angeles, was once seen as a clear path to wealth. You made a purchase, waited, and appreciation seemed to do most of the heavy lifting. As a result, many FedEx employees who built careers in Southern California have long considered real estate a central part of their long-term financial planning.
The math has shifted.
From the Westside to the San Gabriel Valley to the South Bay, families across Los Angeles are experiencing a very different housing environment than they did just a few decades ago. While property holdings still typically continue to appreciate, rising costs in other areas may be chipping away at the financial foundations. The good news is that meaningful financial opportunities still exist for FedEx employees willing to engage in proactive retirement and legacy planning.
Here are some things to consider if you currently own property in Los Angeles or expect to pass it on to the next generation.
Appreciation Still Tells a Story—But Context Matters
A family could have bought a home in Torrance or Pasadena for under $300,000 in the late 1990s or early 2000s. 1 Today, that same property may be worth between $1.5 million and $2 million. 2 As of 2026, the median home price in Los Angeles County was $950,000. 3 On paper, that represents significant accumulated value. However, today’s landscape looks different than in the past:
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- A 3% mortgage rate is no longer typical. Freddie Mac reports that 30-year fixed mortgage rates have averaged well above 6% in recent years. 4
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- Property insurance costs have risen substantially, with several insurers limiting new policies in California.
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- Proposition 13 limits property taxes for long-term owners but resets upon sale.
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- Los Angeles renovation costs rank among the highest nationwide. 5
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- Maintaining an older home can cost tens of thousands annually depending on condition and location.
For FedEx employees, appreciation alone is no longer sufficient reason to hold real estate. Decisions now involve long-term planning, risk assessment, tax considerations, and liquidity analysis.
The Inheritance Formula Has Changed
Many families assume inheriting a Los Angeles property is automatically beneficial. Financially, it can be—but the calculations are more complex today.
Under Proposition 19, children who inherit a primary residence must meet certain requirements to limit property tax reassessment. 6 They generally must:
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- Occupy the home as their primary residence.
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- File for the homeowner’s exemption within one year of the transfer.
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- Stay within specific assessed value limits.
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If they move out, property taxes will reset to market value. California’s statewide property tax rate averages approximately 1% of assessed value (plus local assessments). 7 On a $2 million Los Angeles home, that could mean annual property taxes of $20,000 or more.
For adult children who already own homes elsewhere, retaining inherited property in Los Angeles County can become financially demanding. As a result, properties originally intended to remain in the family are frequently sold.
Property Taxes: The Quiet Divide
Proposition 13 has created two very different homeowner experiences in Los Angeles. A couple who purchased a home in 1995 now worth $1.8 million may pay a fraction of what a new buyer would pay in property taxes. Although California limits annual assessed value increases to 2% under Proposition 13, a buyer purchasing the same home today would pay property taxes based on current market value.
Economists often refer to this dynamic as the “lock-in effect,” where homeowners remain in place due to tax advantages tied to long-held property. From a planning standpoint, this often leads to:
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- Reduced housing mobility.
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- Wealth concentrated heavily in real estate.
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- Reluctance to downsize during retirement.
For many FedEx retirees, the emotional and financial aspects of homeownership become closely connected.
Risk and Insurance Are Now Major Factors
Earthquake exposure, wildfire risk, and tightening insurance markets have also changed property cost structures in Southern California.
In recent years, several major insurers paused or limited new homeowner policies in California. 8 Even where insurance is available, premiums in high-risk areas have increased substantially. 8
In light of these factors, owning property in Los Angeles is no longer viewed as a low volatility asset. Like any major investment, it carries ongoing costs and regional risks that must be evaluated carefully.
Liquidity Matters More Than Ever
Many Los Angeles homeowners are “house rich, cash flow tight.” Despite significant home equity, families may still feel financially constrained. Retirement income planning, health care expenses, college costs, and multigenerational support all require accessible capital—something a home does not easily provide.
Unlike a diversified investment portfolio, a home:
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- Does not generate consistent income
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- Cannot be partially sold
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- Requires ongoing maintenance
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- May take months to sell
From a planning standpoint, it is important to determine whether the home supports your long-term financial objectives or primarily serves as a legacy and emotional anchor.
Capital Gains: A Limited Advantage
Homeowners may exclude up to $250,000 (single) or $500,000 (married filing jointly) of capital gains when selling a primary residence. 9
However, decades of appreciation in Los Angeles can exceed these limits quickly. If a home purchased for $400,000 is sold for $2 million, that creates a $1.6 million gain. After applying the exclusion, a significant taxable amount may remain.
Coordinating sale timing with a broader tax strategy can make a meaningful difference.
Has Homeownership Lost Its Appeal?
Not entirely—but the advantages are no longer automatic.
Los Angeles real estate can still offer:
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- Long-term appreciation potential
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- Housing cost stability for long-term owners
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- Emotional and legacy value
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- The ability to build equity over time
What has changed is the level of planning required:
- Estate plan coordination
- Understanding Proposition 19
- Liquidity planning
- Risk evaluation
- Tax review before transferring or gifting property
What was once a simple “buy and hold” decision has evolved into a more detailed financial strategy.
Planning Ahead
If you own property in Los Angeles or intend to pass it to your children, consider:
- Will your children realistically live in the home?
- Have you calculated potential reassessed property taxes?
- Does real estate represent too much of your net worth?
- Would selling during your lifetime provide greater flexibility?
- Is your property title aligned with your trust and estate plan?
For some families, keeping the property remains appropriate. For others, converting equity and diversifying assets may better support retirement income, intergenerational wealth objectives, or charitable planning.
Final Thoughts
California real estate has a long history of appreciation and opportunity. That remains true in Los Angeles—but the financial landscape is more complex than it once was.
Homeownership today involves understanding cash flow, tax exposure, policy changes, insurance risk, and family dynamics. For FedEx employees approaching retirement or already retired, these factors can influence estate planning outcomes.
The advantages are still there—but they require careful planning.
If you are evaluating how your Los Angeles property fits into your broader retirement and estate plan, it may be time to revisit the numbers.
You can get retirement planning assistance from The Retirement Group. Give us a call at (800) 900-5867 to learn more.
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Sources:
1. Patch. ' Home Prices Have Nearly Tripled In LA Since 2000: Report ,' by Kat Schuster. April 4, 2022.
2. Zillow. ' Pasadena, CA Housing Market ,' January 31, 2026.
3. Federal Reserve Bank of St. Louis (FRED). ' Housing Inventory: Median Listing Price in Los Angeles County, CA ,' February 6, 2026.
4. Freddie Mac. “Primary Mortgage Market Survey® (PMMS®) Archives.” Freddie Mac , 2026, https://www.freddiemac.com/pmms/pmms_archives .
5. House Beautiful. ' Experts Say Renovations Are the Most Expensive in These States ,' by Sarah Lyon. Feb. 14, 2025.
6. Fennemore Law. ' California Proposition 19's Impact on Estate Planning and Gifting of Real Property ,' by Judith Tang. Feb. 17, 2025.
7. reAlpha. ' California Property Tax (2026): Rates, Prop 13 & Cost ,' by Daniel Ares. Feb. 2, 2026.
8. Kiplinger. ' California's Home Insurance Crisis: Rising Risks, Soaring Costs and Limited Options ,' by Carla Ayers. Jan. 16, 2025.
9. IRS. ' Topic no. 701, Sale of your home. ' Jan. 22, 2026.
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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