/General/General%208.png?width=1280&height=853&name=General%208.png)
Healthcare Provider Update: Intel's Healthcare Provider and Upcoming Costs Intel primarily utilizes benefits through various healthcare providers, with many employees accessing plans from major insurers like UnitedHealthcare, Anthem Blue Cross Blue Shield, and others depending on geographical region and specific plan offerings. As we look ahead to 2026, healthcare costs are anticipated to rise significantly, potentially impacting Intel employees and their families. With ACA premium hikes exceeding 60% in some states and the expiration of enhanced federal subsidies looming, many individuals could see their premiums increase by over 75%. Additionally, a rising trend in medical expenses, driven by inflation and supply chain challenges, coupled with escalating pharmaceutical costs, threatens to further strain household budgets. Consequently, these developments necessitate strategic planning by Intel employees to alleviate the financial burden associated with healthcare coverage in the coming year. Click here to learn more
As Intel retirees in Missouri take advantage of tax-free public pensions and Social Security, Adviser Patrick Ray of the Retirement Group, a division of Wealth Enhancement Group, says understanding state tax policies helps with financial planning and Retirement.
With Senate Bill 448, which provides substantial tax relief, Adviser Michael Corgiat of the Retirement Group, a division of Wealth Enhancement Group, advises Intel retirees to stay informed about state tax policies as strategic relocation can impact long-term financial security.
In this article, we will discuss:
1. Missouri now exempts Intel retirees from their public pension and Social Security taxes.
2. Federal versus state taxes on Social Security benefits.
3. Migration trends and their relation to state tax policies on retirement income.
Starting next fiscal year, Intel retirees in Missouri will be spared state income tax on their public pension and Social Security payments. Senate Bill 448 will save these Intel retirees an estimated USD 309 million a year.
Background on the Missouri Tax Exemption.
The tax picture was very different in Missouri before Senate Bill 448 took effect in July. State income taxes on residents over 62 with a gross income of USD 85,000 or married couples with a gross income of USD 100,000 were up to 4.95 percent. That exemption reflects a willingness of the state to help retirees with rising living costs - like many Americans.
This isn't a Missouri subject. Social Security payments in the United States average about USD 1,699 a month and run about USD 20,388 annually, according to the Social Security Administration. But many retirees continue to pay taxes on their retirement income - Social Security included - anyway.
Framework for Federal Social Security Tax.
This tax equals the provisional income - that is, the sum of the gross income plus half of Social Security benefits - of each person. Federal tax rates for beneficiaries can be up to 85 percent of Social Security payments. But their provisional revenues below USD 25,000 (or USD 32,000 for couples) are exempt from this federal tax.
While virtually all states in the United States exempt Social Security benefits from taxation, about a dozen states tax them at least in part. This does not include Supplemental Security Income, which is available to people age 65 and older as well as to adults and children with disabilities or vision impairments.
Taxation of Social Security Benefits by State.
Following Missouri's exemption, only Colorado and Connecticut and Kansas and Minnesota and Montana and Nebraska and New Mexico, Rhode Island and Vermont, Utah and West Virginia tax such benefits.
All these states have their own policy, but all provide some tax benefits or exemptions based on age and income of the beneficiary. Some states are moving to expand Social Security exemptions and deductions. So basically deductions reduce taxable income and reduce tax liability.
In relation to Missouri's recent decision, it is interesting to see how Intel retirees move around. States with tax-friendly policies for Intel retirees like Florida saw a boom in senior citizens in 2020, according to a United Van Lines study. States that taxed Social Security benefits lost residents by a net amount. As Intel professionals consider where to retire, states with favorable tax policies might offer financial benefits as well as a leg up on broader migration trends to better suit their retirement goals.
A brief summary of the taxation policies in some of these states:
Colorado: The state income tax cap on Social Security benefits for retirees 65 and older will increase to USD 24,000 beginning in 2021 for Colorado residents. The 55-64 age group can claim only USD 20,000 in medical expenses.
Connecticut: Connecticut tax exemptions are calculated on adjusted gross incomes (AGI). Exempt are those with an AGI below USD 75,000 and couples with an AGI below USD 100,000. Beyond those ceilings, 75% of their benefits are taxable.
Minnesota: Minnesota recently extended those exemptions to include complete deductions for retirees making USD 78,000 for individuals and USD 100,000 for couples.
Montana: Federal regulations exempt Montana retirees with incomes below certain levels. State officials want to abolish Social Security income tax entirely.
Nebraska: A movement to eliminate Social Security taxes by 2025 in Nebraska exempts Intel retirees below certain AGI limits.
New Mexico: New Mexico law gives full deductions to single residents and couples with some AGIs.
Rhode Island: AGIs below thresholds exempt residents of the standard Social Security retirement age from all taxes.
Utah: In Utah, income brackets determine tax credits for taxable benefits based on Utah income - similar to federal calculations.
Vermont: In 2022, Vermont made full or partial exemptions based on AGI possible.
West Virginia: West Virginia began eliminating Social Security taxes for eligible people and couples in 2020.
In Closing
The changing face of Social Security income taxation highlights state efforts to help retirees out financially. As living costs increase, such policies are necessary to protect our senior citizens. Potential retirees and those in retirement may find these policies helpful in making decisions about residency and finances.
Retirement tax policies are like plotting a course across islands. The Missouri bridge allows retirees tax-free passage on their public pension and Social Security. But as you travel farther, you will pass 11 more islands (states) that still require a toll with different fees and eligibility requirements. For those on the Intel ship, navigating with this map means more treasure and fewer surprises in retirement.
Added Fact:
A 2023 report from The Senior Citizens League shows that while some states are becoming more tax-friendly toward Social Security benefits, retirees should be aware that state policies can change. To date this year, Colorado, Minnesota, and West Virginia have tightened their Social Security tax policies for retirees, TSCL's report says. But the report also says Nebraska is still gradually eliminating Social Security taxes, so tax policies could evolve. This information is critical for Intel retirees as they plan for retirement and weigh new state tax policies on their financial future.
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
Added Analogy:
It's like sailing across a shifting archipelago to compare retirement tax policies across states. Just imagine each state as an island with its own toll bridge. You are aboard a vessel - headed toward a comfortable and financially secure retirement as a Intel retiree. Missouri is the first island where a new bridge lets you keep your public pension and Social Security tax-free. And above the calm water lies another 11 islands with their own toll bridges. Some lowered their tolls, like Colorado and West Virginia, while others like Nebraska are still dismantling their toll booths. Knowing these shifting tax landscapes is like having a course planner - plotting a course to maximize your retirement treasure without running into unexpected financial hurdles. It is a voyage on which knowledge is your compass toward retirement security.
Sources:
1. Missouri Senate. Senate Bill 448 . Missouri Senate, 2023. senate.mo.gov .
2. Nelson, Alisa. 'Missouri Bill Would Exempt Social Security Benefits from State Income Tax.' Missourinet , 10 Jan. 2023. missourinet.com .
3. Lock, Cheryl. 'States That Tax Social Security Benefits in 2025.' Kiplinger , 2021. kiplinger.com .
4. Lock, Cheryl. 'Is Your State Taxing Social Security? Find Out Now.' Investopedia , 2023. investopedia.com .
5. Nelson, Alisa. 'Missouri Bill Would Exempt Social Security Benefits from State Income Tax.' Missourinet , 10 Jan. 2023. missourinet.com .
How does the Intel Pension Plan define the eligibility criteria for employees looking to retire, and what specific steps must they take to determine their benefit under the Intel Pension Plan?
Eligibility Criteria for Retirement: To be eligible for the Intel Pension Plan, employees must meet specific criteria, such as age and years of service. Benefits are calculated based on final average pay and years of service, and employees can determine their benefits by logging into their Fidelity NetBenefits account, where they can view their projected monthly benefit and explore different retirement dates(Intel_Pension_Plan_Dece…).
What are the implications of choosing between a lump-sum distribution and a monthly income from the Intel Pension Plan, and how can employees assess which option is best suited for their individual financial circumstances?
Lump-Sum vs. Monthly Income: Choosing between a lump-sum distribution and monthly income under the Intel Pension Plan depends on personal financial goals. A lump-sum provides flexibility but exposes retirees to market risk, while monthly payments offer consistent income. Employees should consider factors like their financial needs, life expectancy, and risk tolerance when deciding which option fits their situation(Intel_Pension_Plan_Dece…).
In what ways can changes in interest rates affect the lump-sum benefit calculation under the Intel Pension Plan, and why is it essential for employees to be proactive about their retirement planning concerning these fluctuations?
Interest Rates and Lump-Sum Calculations: Interest rates directly affect the lump-sum calculation, as higher rates reduce the present value of future payments, leading to a smaller lump-sum benefit. Therefore, it's crucial for employees to monitor interest rate trends when planning their retirement to avoid potential reductions in their lump-sum payout(Intel_Pension_Plan_Dece…).
How do factors like final average pay and years of service impact the pension benefits calculated under the Intel Pension Plan, and what resources are available for employees to estimate their potential benefits?
Impact of Final Average Pay and Years of Service: Pension benefits under the Intel Pension Plan are calculated using final average pay (highest-earning years) and years of service. Employees can use available tools, such as the Fidelity NetBenefits calculator, to estimate their potential pension based on these factors, giving them a clearer picture of their retirement income(Intel_Pension_Plan_Dece…).
How should employees approach their financial planning in light of their Intel Pension Plan benefits, and what role does risk tolerance play in deciding between a lump-sum payment and monthly income?
Financial Planning and Risk Tolerance: Employees should incorporate their pension plan benefits into broader financial planning. Those with a lower risk tolerance might prefer the steady income of monthly payments, while individuals willing to take investment risks might opt for the lump-sum payout. Balancing these decisions with other income sources is vital(Intel_Pension_Plan_Dece…).
What considerations should Intel employees evaluate regarding healthcare and insurance needs when transitioning into retirement, based on the guidelines established by the Intel Pension Plan?
Healthcare and Insurance Needs: Intel employees approaching retirement should carefully evaluate their healthcare options, including Medicare eligibility, private insurance, and the use of their SERMA accounts. Considering how healthcare costs fit into their retirement budget is crucial, as these costs will likely increase over time(Intel_Pension_Plan_Dece…).
How can employees maximize their benefits from the Intel Pension Plan by understanding the minimum pension benefit provision, and what steps can they take if their Retirement Contribution account falls short?
Maximizing Benefits with the Minimum Pension Provision: Employees can maximize their pension benefits by understanding the minimum pension benefit provision, which ensures that retirees receive a certain income even if their Retirement Contribution (RC) account balance is insufficient. Those whose RC accounts fall short will receive a benefit from the Minimum Pension Plan (MPP)(Intel_Pension_Plan_Dece…).
What resources does Intel offer to support employees in their retirement transition, including assessment tools and financial planning services tailored to those benefiting from the Intel Pension Plan?
Resources for Retirement Transition: Intel provides several resources to support employees' transition into retirement, including financial planning tools and access to Fidelity's retirement calculators. Employees can use these tools to run scenarios and determine the most beneficial pension options based on their financial goals(Intel_Pension_Plan_Dece…).
What strategies can retirees implement to manage taxes effectively when receiving payments from the Intel Pension Plan, and how do these strategies vary between lump-sum distributions and monthly income options?
Tax Strategies for Pension Payments: Managing taxes on pension payments requires strategic planning. Lump-sum distributions are often subject to immediate taxation, while monthly income is taxed as regular income. Retirees can explore tax-deferred accounts and other strategies to minimize their tax burden(Intel_Pension_Plan_Dece…).
How can employees of Intel contact Human Resources to get personalized assistance with their pension questions or concerns regarding the Intel Pension Plan, and what specific information should they be prepared to provide during this communication?
Contacting HR for Pension Assistance: Intel employees seeking assistance with their pension plan can contact HR for personalized support. It is recommended that they have their employee ID, retirement dates, and specific pension-related questions ready to expedite the process. HR can guide them through benefit calculations and options(Intel_Pension_Plan_Dece…).
-2.png?width=300&height=200&name=office-builing-main-lobby%20(52)-2.png)
.webp?width=300&height=200&name=office-builing-main-lobby%20(27).webp)
-2.png)
.webp)