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How Consolidated Edison Retirees Can Take Advantage of the Helpful Tax Benefits Legacy IRA's Provide

Consolidated Edison employees working with advisors like (Advisor Name) from The Retirement Group, a division of Wealth Enhancement Group, can take advantage of tools like The Legacy IRA to increase their philanthropic impact and tax efficiency. These ''fulfill personal legacy aspirations while ensuring ongoing support of charities - a powerful example of the intersection of sound financial planning and meaningful giving.'

According to (Advisor Name), a division of Wealth Enhancement Group called the Retirement Group, Consolidated Edison professionals should look at The Legacy IRA as ''a vehicle for giving back while being prudent with money,'' said (Advisor Name). This meets their retirement and legacy goals and takes advantage of tax benefits, allowing them to ''take their impact far beyond their corporate careers into purpose-driven philanthropy.'

In this article we will discuss:

1. Early Experiences in Philanthropy: How formative years and upbringing shape lifetime attitudes toward charitable giving.
2. Trends in Philanthropy Among Consolidated Edison Retirees Changing Trends: Evolving financial environments and intergenerational wealth transfers drive the shift from traditional estate planning to purpose-driven legacy planning.
3. Introduction & Benefits of Legacy IRAs: The mechanics of Legacy IRAs under the SECURE 2.0 Act and how they marry philanthropy with financial and tax benefits for retirees.

This generosity often takes root in early life and shapes how adults experience charitable giving. My humble upbringing on a Wisconsin small farm taught me to give back. My parents always supported the church and community even with their modest means. Such formative experiences shaped my philanthropic endeavors. I believe in the cycle of generosity - that with each act of generosity we get something of great value back - new insights, memorable encounters or even money.

And the giving gives Consolidated Edison retirees a reason to live - and allows us to be thankful for our privileges. The current environment of massive intergenerational wealth transfers and the longevity economy is transforming the face of philanthropy. Like me, many Consolidated Edison retirees are rethinking traditional estate planning for more purposeful legacy planning. We're not distributing all of our wealth to our families - we're looking at ways to balance inheritance with significant charitable gifts.

A powerful instrument of the SECURE 2.0 Act of 2023 is the It allows middle-income Americans in particular to combine philanthropic intent with tax benefits and income generation. Hope this blog post will help financial advisors better serve clients in creating purpose-driven Legacy planning.

Evolution of the Legacy IRA.

With 2022 over, the 117th Congress of the United States was preparing a major financial shift: the SECURE 2.0 Act - the Consolidated Appropriations Act of 2023. Among its many provisions was an expanded charitable IRA rollover. It started in 2006 as a temporary measure allowing people 70 1/2 and older to take Qualified Charitable Distributions (QCDs) from their individual retirement account (IRA). The law now lets you rollover for life into a plan with lifetime income guarantees.

Learning About the Charitable Gift Annuity (CGA)

The Charitable Gift Annuity is part of the Legacy IRA. The contract is between an individual and a nonprofit organization called a CGA. For a donation, the nonprofit promises to pay a fixed income for life to the benefactor. The remainder is given to the chosen charity upon the death of the benefactor. Multiple factors, including the age of the contributor at the time of contribution, determine CGA payments. This arrangement provides donors with a regular income stream and guarantees that their preferred charities will continue to receive support indefinitely.

Study finds increasing numbers of Consolidated Edison retirees use their Individual Retirement Account (IRA) for charities. From 2021, anyone over 70 1/2 can send directly from their IRA up to USD 100,000 per year to a qualified charity. This helps Consolidated Edison retirees meet required minimum distribution (RMD) obligations and supports charities. For some, these strategies may offer a satisfying combination of financial planning and philanthropy when they retire from corporate roles.

The Legacy IRA is a twist on CGAs that have existed for some time now. Transfers to a CGA aren't deductible contributions. But they count toward the annual Required Minimum Distribution (RMD), and are especially useful for those 73 and older. This entire income is called ordinary income.

My Journey Into Legacy Planning.

I saw the potential in the Legacy IRA and I took advantage of that. Because I had a lot of tax-deferred retirement savings and other income sources, I had to take a large minimum distribution that put me in an upper tax bracket. I could have managed my tax liability better by putting USD 50,000 into a CGA. The CGA also has a fixed payout rate - in my case at age 76 it was 6.8% per year on the USD 50,000.

How to Set Up a Legacy IRA.

Identifying Charitable Causes: I picked organizations I had supported for years and knew would keep getting funding after my death. Choosing a CGA Administrator: My CGA Administrator was Community Foundation of Tampa Bay (CFTB). Their efficiency and history with me made them ideal business associates. Reviewing the Details: I evaluated the rollover details with Crescendo Interactive, Inc. Completing the Transfer: Bringing About the Transfer: A tax-free Qualified Charitable Distribution (QCD) of USD 50,000 from my Vanguard traditional IRA helped me save on taxes and create my legacy. Finalizing the Agreement: Conclusion of the Agreement: It was then that I committed to my chosen nonprofit organizations. This fund will ensure ongoing support of these organizations well beyond my death. Receiving the Benefits: A few weeks later, I started receiving CGA income, which made me feel more secure, and my Legacy IRA was set up.

The Role of Financial Advisors.

Financial advisors assist Consolidated Edison customers with Legacy IRA details. Tax benefits, lifetime income, and guarantee for clients 70 and a half and older.Consider your IRA like a mature fruit tree in your financial orchard. As this tree provides shade (tax savings) and produces fruit (returns), so too there is a way to feed the community (charities) without wasting RMDs. This not only ensures the health and longevity of the tree for Consolidated Edison professionals, but also benefits the land (tax benefits) and the ecosystem (charitable endeavors).

Added Fact:

New data from an ICI in 2023 study show that more and more Consolidated Edison retirees are looking for ways to take advantage of Legacy IRAs' tax advantages. It said retirees 70 and a half and older are increasingly using Legacy IRAs to fund charitable causes and also to manage their tax liability. This highlights the value of legacy IRAs as a flexible financial tool that allows retirees to leave a Legacy for charities while optimizing their financial plans and reducing their tax burden - a good option for the Consolidated Edison.

Added Analogy:

Think of Legacy IRAs as the gardens of your financial estate. Like a gardener tends to his plants, Consolidated Edison retirees can take advantage of legacy IRAs to plant a financial Legacy while saving taxes. As a garden produces a bumper crop when properly cared for, a legacy IRA can also provide a bumper financial Legacy for your chosen charities. As a garden design adds value to your property, a Legacy IRA adds value to your philanthropic contributions and tax-efficient financial planning. Think of Legacy IRAs as the ground for your financial garden - planting the seeds of charitable giving and tax benefits - and harvesting the rewards for you and your charitable beneficiaries.

Articles you may find interesting:

Sources:

1. Upton, Suzie. 'Legacy IRA Act.' American Heart Association , 2023, www.heart.org .

2. Kitces, Michael. 'Legacy IRA Rollover To Charitable Gift Annuity.' Kitces.com , 2023, www.kitces.com .

3. 'The Legacy IRA Has Finally Arrived.' Forbes , Jan. 2023, www.forbes.com .

4. Upton, Suzie. 'Special Focus on Seniors and Charitable Giving.' American Heart Association , 2023, www.heart.org .

5. 'How Advisors Can Help Clients Benefit From Legacy IRAs.' Morningstar , 2023, www.morningstar.com .

What is the 401(k) plan offered by Consolidated Edison?

The 401(k) plan offered by Consolidated Edison is a retirement savings plan that allows employees to save a portion of their salary on a tax-deferred basis.

How can employees enroll in the Consolidated Edison 401(k) plan?

Employees can enroll in the Consolidated Edison 401(k) plan by completing the enrollment process through the company’s HR portal or by contacting the HR department for assistance.

Does Consolidated Edison offer a matching contribution to the 401(k) plan?

Yes, Consolidated Edison offers a matching contribution to the 401(k) plan, which helps employees increase their retirement savings.

What is the maximum contribution limit for the Consolidated Edison 401(k) plan?

The maximum contribution limit for the Consolidated Edison 401(k) plan is in line with IRS guidelines, which are updated annually. Employees should check the current limits for the year.

Can employees take loans against their 401(k) savings at Consolidated Edison?

Yes, Consolidated Edison allows employees to take loans against their 401(k) savings, subject to certain terms and conditions.

What investment options are available in the Consolidated Edison 401(k) plan?

The Consolidated Edison 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles, allowing employees to choose based on their risk tolerance.

Is there a vesting schedule for the employer match in the Consolidated Edison 401(k) plan?

Yes, there is a vesting schedule for the employer match in the Consolidated Edison 401(k) plan, which determines how much of the employer contributions employees are entitled to based on their years of service.

How can employees check their 401(k) balance with Consolidated Edison?

Employees can check their 401(k) balance with Consolidated Edison by logging into the retirement plan portal or by contacting the plan administrator.

What happens to the 401(k) savings if an employee leaves Consolidated Edison?

If an employee leaves Consolidated Edison, they have several options for their 401(k) savings, including rolling it over to another retirement account, cashing it out, or leaving it in the Consolidated Edison plan if eligible.

Are there any fees associated with the Consolidated Edison 401(k) plan?

Yes, there may be fees associated with the Consolidated Edison 401(k) plan, which can include administrative fees and investment-related fees. Employees should review the plan documents for detailed information.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.

Consolidated Edison offers a traditional pension plan under the Final Average Pay and CECONY Career Average formulas, which include a Cost-of-Living Adjustment (COLA) to help protect retirement income against inflation. Employees who retired under these formulas receive an automatic COLA, but this does not apply to those under the cash balance formula or hired after June 26, 2005, in certain unions. The pension plan details, including service years and age qualifications, are outlined in the company’s retirement plan documents. Consolidated Edison’s 401(k) plan is managed by Vanguard, offering various investment options. The plan includes employer contributions and is available to all eligible employees. For detailed specifics, refer to the company's 2023 retirement plan documents

Restructuring Layoffs and Company Changes: Consolidated Edison has been actively managing its workforce and financial strategies in response to the evolving energy market. In early 2024, the company announced various structural adjustments, including potential layoffs, to streamline operations and adapt to clean energy initiatives. These actions are critical to address due to the current economic conditions, political pressures to shift towards sustainable energy, and the necessity of maintaining investor confidence amidst market fluctuations. Addressing these workforce adjustments is essential in the current investment climate.

Stock Options: Con Edison provides its employees with stock options, allowing them to purchase shares at a predetermined price. This option becomes valuable if the company's stock price increases over time. The acronym commonly used for these options within the company is ESO (Employee Stock Options). Restricted Stock Units (RSUs): RSUs are awarded to employees as a form of compensation. These units represent a promise to deliver company shares to employees upon meeting certain conditions, such as continued employment over a specific period. The RSUs granted by Con Edison typically vest over a few years, ensuring long-term employee commitment. The RSUs are denoted internally with the acronym RSU.

Healthcare Plans: Con Edison offers comprehensive health benefits through providers like Cigna and CVS Health. For 2024, the Cigna Open Access Plus Copay Plan is a prominent option for retirees under 65 and those who are Medicare-eligible. This plan includes coverage for hospital stays, outpatient services, routine preventive care, and emergency room visits. The benefits also extend to vision care, with coverage for routine eye exams and glasses every 24 months. Cost Management: To manage increasing healthcare costs, especially under Medicare, Con Edison has emphasized the importance of selecting appropriate coverage during open enrollment periods. The company has adjusted its offerings over the years, such as discontinuing the Aetna Non-Medicare plan after 2023 and limiting new enrollments in certain HMOs. Healthcare-Related Acronyms: Specific terms used by Con Edison include "HMO" (Health Maintenance Organization), "PPO" (Preferred Provider Organization), and "FSA" (Flexible Spending Account), which are essential for understanding the various health plan options and associated benefits.

Additional Articles

Check Out Articles for Consolidated Edison employees

For more information you can reach the plan administrator for Consolidated Edison at 4 Irving Place New York, NY 10003; or by calling them at (212) 460-4600.

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