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
“Assumable mortgages can occasionally create opportunities in a higher-rate environment, but FedEx employees approaching retirement should evaluate how housing decisions fit into their broader financial picture before making a move,” – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.
“During periods of higher mortgage rates, assumable mortgages can become part of the conversation, but FedEx employees nearing retirement may benefit from viewing housing choices within the context of long-term income planning, health care costs, and overall retirement readiness,” – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.
In this article, we will discuss:
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How assumable mortgages work and why they are being discussed more often in today’s higher interest rate environment.
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The eligibility requirements, limitations, and financial considerations involved in transferring an existing mortgage.
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How housing decisions may connect to broader retirement planning considerations for FedEx employees.
By Wealth Enhancement's Neva Bradley, CFP®
Many Baby Boomers who built long careers with companies like FedEx love their homes but quietly recognize that they may no longer need as much space. Once the nest empties, the four-bedroom house that once held children, pets, and holiday gatherings can begin to feel oversized.
At the same time, many younger families are searching for larger homes that better meet their needs. This housing dynamic may set the stage for the use of assumable mortgages, an arrangement that allows a homebuyer to take over the seller's existing mortgage.
FedEx employees approaching retirement could benefit from this strategy, particularly for those who may have locked in historically low mortgage rates, like that those prevailed in 2020 and 2021. During that period, 30-year fixed mortgage rates briefly dropped below 3%, and many homeowners obtained loans below 4%. 1
In today’s higher rate environment, sellers could arguably use the leverage of an assumable mortgage to secure a higher purchase price on their homes in exchange for allowing the buyer to take on a mortgage at rates lower than current market averages.
What Is an Assumable Mortgage?
An assumable mortgage allows a buyer to take over the seller’s existing loan rather than obtaining a new mortgage. If the lender approves the transaction, the buyer may take on the loan’s existing interest rate, remaining balance, and repayment terms, something that could benefit FedEx employees who obtained home loans during a lower rate period.
Instead of obtaining a new mortgage at current rates, a qualified buyer could potentially assume a homeowner’s mortgage that originated during the pandemic-era housing market at a rate near 2.75% or 3%. This feature sometimes becomes relevant when FedEx homeowners evaluate potential selling strategies.
However, this is only possible if the buyer meets the lender’s qualification requirements and the mortgage itself allows assumption. In many cases, the lender still reviews the buyer’s credit profile and financial standing, which may influence the practicality of this option for FedEx employees.
Loans That May Be Eligible
Not every mortgage can be assumed. Government-backed loans often allow assumptions, including:
- FHA loans
- VA loans
- USDA loans
Conventional loans backed by Fannie Mae or Freddie Mac typically do not allow assumptions, although certain adjustable-rate mortgage structures may permit limited forms of assumption depending on the loan terms. This distinction can matter for FedEx retirees evaluating potential buyers.
Even when a mortgage is assumable, the buyer generally must still qualify with the lender or loan servicer. Credit review and financial verification are normally required before an assumption is approved, something FedEx employees should understand when exploring this strategy.
An Important Detail: Seller Liability Release
One of the most significant—and sometimes misunderstood—aspects of mortgage assumptions is the release of liability.
If the lender does not formally release the seller from responsibility, the seller may remain legally liable for the mortgage even after the loan has been transferred to the buyer. This detail can be important for homeowners considering this type of transaction.
If the buyer later defaults and the seller was not properly released, the seller could still face financial consequences related to the loan. For that reason, lender approval and proper documentation are essential parts of the process for FedEx employees considering an assumable mortgage sale.
The Reality of the Down Payment
One practical challenge with assumable mortgages is home equity.
Home values have increased significantly over time. For example, if a home originally purchased for $500,000 is now worth $700,000 and the remaining mortgage balance is $420,000, the buyer must pay the difference between the home’s price and the remaining loan balance. This type of equity gap may be something FedEx employees encounter when selling a property.
That difference may require:
- A significant cash down payment
- A second mortgage to cover the remaining amount
This can create challenges for buyers, particularly first-time buyers, which may influence how sellers structure potential transactions.
Additional Factors to Consider
Several other factors can affect how practical an assumable mortgage strategy may be.
Approval Timelines
Certain mortgage programs include timelines for evaluating assumption requests. For example, some FHA and VA guidelines outline how quickly lenders should review completed applications, though actual timelines may vary for buyers interested in properties owned by FedEx retirees.
Delinquency Restrictions
Many mortgage programs require the loan to be current—or brought current during the transaction—before the assumption can be approved. This requirement may apply to properties owned by FedEx employees considering a sale.
VA Loan Eligibility
With VA loans, the original borrower’s VA entitlement may remain attached to the property unless it is properly substituted. This detail could affect the seller’s ability to use VA benefits for a future home purchase, something that may matter for some FedEx employees who are veterans.
Fees
Assumable mortgages may include administrative or transfer fees charged by the lender or loan servicer. While these costs may be lower than those associated with originating a new loan, they still need to be considered by buyers and sellers.
Second Mortgage Considerations
If the buyer needs a second loan to cover the difference between the purchase price and the assumable balance, coordinating with multiple lenders may make the transaction more complex. This situation occasionally arises when FedEx employees have accumulated significant equity in their home.
Retirement Planning and Housing Decisions
Housing decisions often connect to broader financial planning considerations.
For individuals approaching retirement, downsizing may involve more than simply reducing square footage. Factors such as cash flow, liquidity, investment allocation, taxes, and long-term planning often become part of the conversation for long-tenured FedEx employees preparing for retirement.
At The Retirement Group , housing decisions are frequently reviewed alongside:
- Retirement income planning
- Tax considerations
- Health care planning
- Estate planning
- Long-term portfolio management strategies
For many households, a home represents one of their largest financial assets. Decisions about downsizing, selling, or financing a future home purchase can play an important role in retirement planning for FedEx employees.
Thinking About Moving?
If downsizing is part of your retirement considerations, it may help to review your full financial picture before making a decision.
The Retirement Group often discusses housing decisions with individuals and families within the context of broader retirement planning.
To learn more about how housing decisions may fit into your overall retirement strategy, you can speak with a member of The Retirement Group at (800) 900-5867 .
Downsizing is not only a real estate decision—it can also become an important element of long-term financial planning.
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Sources:
1. Federal Reserve Bank of Philadelphia. ' The Pandemic Mortgage Boom ,' by Natalie Newton, James Vickery. Q3/Q4 2022.
2. Freddie Mac. Market Watch: Housing Trends Report . Freddie Mac Single-Family Division, 2022, p. 17. https://sf.freddiemac.com/docs/pdf/other/market-watch-housing-trends_rrs22.pdf.
3. United States, Department of Veterans Affairs, Veterans Benefits Administration. Circular 26-23-10: VA Loan Assumption Updates . 22 May 2023, p. 1. https://www.benefits.va.gov/HOMELOANS/documents/circulars/26-23-10.pdf.
4. United States, Department of Agriculture, Rural Development. HB-1-3555 Single Family Housing Guaranteed Loan Program Technical Handbook . USDA Rural Development, rev. 14 Apr. 2025, pp. 17-14–17-15. https://www.rd.usda.gov/media/file/download/hb-1-3555-consolidated.pdf.
5. Stucki, Barbara R., Jane Tavares, and Marc A. Cohen. Using Home Equity to Sustain Cash Flow for Aging in Place . National Council on Aging, Apr. 2021, pp. 3, 5, 7, 21, 27. https://assets.ncoa.org/ffacfe7d-10b6-0083-2632-604077fd4eca/3c1dd0cf-08a8-46ed-812c-5a56fdf6ded4/2021-NCOA_Home%20Equity-Report%20TWO_5-5.pdf .
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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