New Update: Healthcare Costs Increasing by Over 60% in Some States. Will you be impacted?

Important Information for Kroger Professionals to Know About Their IRA Accounts

Healthcare Provider Update: Healthcare Provider for Kroger Kroger partners with a variety of health insurance providers for its employee healthcare plans, which typically include major insurers such as Anthem Blue Cross Blue Shield, UnitedHealthcare, and others. These partnerships offer comprehensive healthcare coverage options to their employees, ensuring access to a broad network of medical services. Potential Healthcare Cost Increases for Kroger in 2026 As we look ahead to 2026, Kroger employees-along with many others-may face substantial healthcare cost increases as health insurance premiums for Affordable Care Act (ACA) marketplace plans are projected to surge. In some states, premiums could rise by as much as 60%, driven by factors such as the expiration of enhanced federal premium subsidies and escalating medical costs, which are now rising at an alarming rate due to inflation and increased demand for healthcare services. According to analysts, without congressional intervention, the average out-of-pocket premium for ACA enrollees could jump by over 75%, putting financial strain on many families and potentially affecting their access to necessary healthcare services. Click here to learn more

For Kroger employees nearing retirement, tools like spousal IRAs and backdoor Roth conversions can increase retirement savings flexibility - but planning ahead can prevent tax surprises - said Wesley Boudreaux, of The Retirement Group, a division of Wealth Enhancement Group.

'Kroger professionals should optimize their IRA contributions now that the Estate Tax Exemptions are changing,' said Michael Corgiat, a representative of The Retirement Group, a division of Wealth Enhancement Group.

In this article, we will discuss:

1. Contribution limits and income thresholds for IRAs.

2. Spousal IRA benefits & strategies.

3. Top tax considerations and planning for high earners: the pro-rata rule and Roth conversions.

Individual Retirement Accounts are a major component of retirement planning and provide many tax advantages. But understanding IRA contributions in the context of income limits helps Kroger professionals plan for retirement.

Understanding IRA Contribution Limits

For those planning a retirement, IRA contributions are capped annually. Such limits are recalculated periodically for inflation and other economic factors. For example, in 2023 the standard IRA contribution limit is USD 6,500 - up from USD 6,000 for those 50 and older - respectively. These limits will rise to USD 7,000 and USD 8,000 in 2024.

IRA Income Thresholds for Contributions.

Whether you can contribute directly to a Roth IRA or receive a tax deduction on a traditional IRA contribution is determined by your income. Those thresholds may impose restrictions on high earners. For example, by 2023, a married couple filing jointly must earn less than USD 218,000 a year for full Roth IRA contributions and be phased out with income greater than USD 228,000.

But fewer know that there's also an income floor for IRA contributions. Your earned income must at least match your IRA contribution. Especially true for those with lower earned income due to retirement or reduced hours.

The Spousal IRA: An Advantage for Couples

The spousal IRA provision is useful for married couples when one partner has little or no earned income. This rule doubles the IRA contribution potential of a spouse with enough earned income to contribute to an IRA in the name of the non-earning spouse. This is a plus for couples where one partner is retired or unemployed.

High-Income Couples: Navigating Roth IRA Contributions

High earners may be limited in contributing directly to a Roth IRA or receiving tax deductions for traditional IRA contributions. Here is where a spousal backdoor Roth IRA comes in handy. They let top earners go around those limits by first contributing to a non-deductible traditional IRA and then converting it to a Roth IRA.

Pro-Rata Rule and Tax Considerations for Kroger Professionals.

Know the pro-rata rule of the IRS for backdoor Roth IRA conversions. The proportion of pre-tax versus after-tax money in your IRAs may cause a tax bill during the conversion process. Know the tax consequences of a spousal backdoor Roth IRA and plan for them accordingly.

Evaluate whether additional savings are needed.

Although maximizing IRA contributions can be a great strategy, you still should consider whether additional savings are needed. When you and your spouse contribute to employer-sponsored retirement plans, additional IRA contributions may outweigh other financial goals and needs.

Diversifying Retirement Income

Spousal IRAs help diversify your retirement income sources. For instance, if most of your retirement savings are currently invested in pre-tax accounts like 401(k)s, contributing to a Roth IRA can earn you tax-free income in retirement while giving you more freedom with your retirement planning.

Spousal IRA Contributions - Making the Decision.

If one partner has little earned income, a spousal IRA may be a way to increase retirement savings. Particularly if traditional IRA deductions are not possible or if direct Roth contributions are capped by income. In such situations, the backdoor Roth method is an option.

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Using IRA contributions wisely, including understanding spousal IRAs and backdoor Roth IRAs, is critical to retirement savings. And this is particularly true for people transitioning to retirement or who are already retired - matching savings to present income levels and goals for the future. Keep up with these retirement savings tools and review your finances often.

For Kroger professionals over age 60 and especially those with substantial assets, knowing the current Estate Tax Landscape is critical. The federal estate tax exemption stands at a record USD 12,920,000 per person - or nearly USD 26 million for a couple - as of 2023. That exemption will be halved by 2026 unless Congress intervenes. So big estates should take advantage of this exemption as soon as possible. That might mean completely gifting or creating irrevocable trusts that use up the existing exemption while reducing future estate tax liability.

A yacht sailing through shifting tides and currents is similar to handling IRA contributions and estate taxes. Like a sailor who knows the sea to navigate, Kroger professionals approaching retirement or retired must understand IRA limits, spousal IRA rules, and how estate tax exemptions are changing. Much like how the tides change direction on a yacht, changing tax laws and IRA regulations can change the direction of one's course toward a secure and prosperous Kroger retirement.

Sources:

1. Saunders, Laura. 'Your Guide to Taxes for Retirees and Retirement Accounts.' The Wall Street Journal , 20 Feb. 2025, pp. 1-3.

2. 'Retirement Topics - IRA Contribution Limits.' Internal Revenue Service , Aug. 2024, www.irs.gov/retirement-plans/plan-participant-employee/ira-contribution-limits .

3. Chen, James. 'Backdoor Roth IRA: Advantages and Tax Implications Explained.' Investopedia , 15 May 2015, www.investopedia.com/articles/retirement/051515/backdoor-roth-ira-advantages-and-tax-implications-explained.asp .

4. Lake, Rebecca. 'A Guide to the Pro-Rata Rule and Roth IRAs.' SmartAsset , Nov. 2024, www.smartasset.com/retirement/guide-to-the-pro-rata-rule-and-roth-iras .

5. Smith, John. 'The Spousal IRA.' The FI Tax Guy , Jan. 2024, www.fitaxguy.com/spousal-ira .

How does the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN ensure that employees receive adequate retirement benefits calculated based on their years of service and compensation? Are there specific formulas or formulas that KROGER uses to ensure fair distribution of benefits among its participants, particularly in regards to early retirement adjustments?

The KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN ensures that employees receive adequate retirement benefits based on a formula that takes into account both years of credited service and compensation. The plan, being a defined benefit plan, calculates benefits that are typically paid out monthly upon reaching the normal retirement age, but adjustments can be made for early retirement. This formula guarantees that employees who retire early will see reductions based on the plan’s terms, ensuring a fair distribution across participants(KROGER_2023-10-01_QDRO_…).

In what ways does the cash balance formula mentioned in the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN impact the retirement planning of employees? How are these benefits expressed in more relatable terms similar to a defined contribution plan, and how might this affect an employee's perception of their retirement savings?

The cash balance formula in the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN impacts retirement planning by expressing benefits in a manner similar to defined contribution plans. Instead of a traditional annuity calculation, the benefits are often framed as a hypothetical account balance or lump sum, which might make it easier for employees to relate their retirement savings to more familiar terms, thereby influencing how they perceive the growth and adequacy of their retirement savings(KROGER_2023-10-01_QDRO_…).

Can you explain the concept of "shared payment" and "separate interest" as they apply to the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN? How do these payment structures affect retirees and their alternate payees, and what considerations should participants keep in mind when navigating these options?

In the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN, "shared payment" refers to a payment structure where the alternate payee receives a portion of the participant’s benefit during the participant's lifetime. In contrast, "separate interest" means that the alternate payee receives a separate benefit, typically over their own lifetime. These structures impact how retirees and their alternate payees manage their retirement income, with shared payments being tied to the participant’s life and separate interests providing independent payments(KROGER_2023-10-01_QDRO_…).

What procedures does KROGER have in place for employees to access or review the applicable Summary Plan Description? How can understanding this document help employees make more informed decisions regarding their retirement benefits and entitlements under the KROGER plan?

KROGER provides procedures for employees to access the Summary Plan Description, typically through HR or digital platforms. Understanding this document is crucial as it outlines the plan’s specific terms, helping employees make more informed decisions about retirement benefits, including when to retire and how to maximize their benefits under the plan(KROGER_2023-10-01_QDRO_…).

With regard to early retirement options, what specific features of the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN can employees take advantage of? How does the plan's definition of "normal retirement age" influence an employee's decision to retire early, and what potential consequences might this have on their benefits?

The KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN offers early retirement options that include adjustments for those retiring before the plan’s defined "normal retirement age." This early retirement can result in reduced benefits, so employees must carefully consider how retiring early will impact their overall retirement income. The definition of normal retirement age serves as a benchmark, influencing the timing of retirement decisions(KROGER_2023-10-01_QDRO_…).

How does the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN address potential changes in federal regulations or tax law that may impact retirement plans? In what ways does KROGER communicate these changes to employees, and how can participants stay informed about updates to their retirement benefits?

The KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN incorporates changes in federal regulations or tax laws by updating the plan terms accordingly. KROGER communicates these changes to employees through official channels, such as newsletters or HR communications, ensuring participants are informed and can adjust their retirement planning in line with regulatory changes(KROGER_2023-10-01_QDRO_…).

What are some common misconceptions regarding participation in the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN that employees might have? How can these misconceptions impact their retirement planning strategies, and what resources does KROGER provide to clarify these issues?

A common misconception regarding participation in the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN is that it functions similarly to a defined contribution plan, which it does not. This can lead to confusion about benefit accrual and payouts. KROGER provides resources such as plan summaries and HR support to clarify these misunderstandings and help employees better strategize their retirement plans(KROGER_2023-10-01_QDRO_…).

How does the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN interact with other employer-sponsored retirement plans, specifically concerning offsetting benefits? What implications does this have for employees who may also be participating in defined contribution plans?

The KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN interacts with other employer-sponsored retirement plans by offsetting benefits, particularly with defined contribution plans. This means that benefits from the defined benefit plan may be reduced if the employee is also receiving benefits from a defined contribution plan, impacting the total retirement income(KROGER_2023-10-01_QDRO_…).

What options are available to employees of KROGER regarding the distribution of their retirement benefits upon reaching retirement age? How can employees effectively plan their retirement income to ensure sustainability through their retirement years based on the features of the KROGER plan?

Upon reaching retirement age, KROGER employees have various options for distributing their retirement benefits, including lump sums or annuity payments. Employees should carefully plan their retirement income, considering the sustainability of their benefits through their retirement years. The plan’s features provide flexibility, allowing employees to choose the option that best fits their financial goals(KROGER_2023-10-01_QDRO_…).

How can employees contact KROGER for more information or assistance regarding the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN? What are the recommended channels for employees seeking guidance on their retirement benefits, and what type of support can they expect from KROGER's human resources team?

Employees seeking more information or assistance regarding the KROGER CONSOLIDATED RETIREMENT BENEFIT PLAN can contact the company through HR or dedicated plan administrators. The recommended channels include direct communication with HR or online resources. Employees can expect detailed support in understanding their benefits and planning for retirement(KROGER_2023-10-01_QDRO_…).

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

Kroger offers both a defined benefit pension plan and a 401(k) retirement savings account plan. The defined benefit plan provides retirement income based on years of service and final average pay. The 401(k) plan allows employees to save for retirement with personal and employer contributions, including a company match. Employees can choose from various investment options within the 401(k) plan to grow their retirement savings.

Operational Changes: Kroger is undergoing a restructuring process that includes closing underperforming stores and cutting administrative costs. Layoffs: The company has announced layoffs affecting about 1,500 employees (Source: CNN). Financial Performance: Despite these changes, Kroger reported a 7% increase in same-store sales for Q2 2023, reflecting strong consumer demand (Source: Kroger).

Kroger offers RSUs that vest over time, providing shares to employees upon vesting. Stock options are also available, allowing employees to purchase shares at a set price, potentially benefiting from stock price increases.

Kroger has made significant updates to its employee healthcare benefits to align with the current economic, investment, tax, and political environment. In 2022, Kroger Health, the healthcare division of The Kroger Co., entered into a direct agreement with Prime Therapeutics to ensure continued access to affordable healthcare services for over 33 million Americans. This agreement, effective January 1, 2023, allowed Kroger's pharmacies to remain in-network for Prime's Medicare Part D members and other commercial, Medicare, and Medicaid customers. This initiative underscores Kroger's commitment to providing comprehensive healthcare services, including administering COVID-19 vaccines, offering in-store antibody tests, and distributing at-home COVID-19 tests, thereby enhancing health access and affordability. In 2023, Kroger was recognized for its commitment to workplace mental health, receiving the Gold Bell Seal for Workplace Mental Health from Mental Health America for the second consecutive year. This certification highlights Kroger's efforts to create a supportive and caring environment for its associates, focusing on mental, physical, and financial well-being. Kroger's wellness programs, mental health services, Employee Assistance Programs (EAP), and paid time off were rigorously evaluated, demonstrating the company's ongoing dedication to employee well-being. These efforts are part of Kroger's broader strategy to ensure a healthy and productive workforce, which is critical in navigating the current economic challenges and maintaining long-term business success.

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For more information you can reach the plan administrator for Kroger at 104 vine street Cincinnati, OH 45202-1100; or by calling them at 513-762-4000.

https://www.thekrogerco.com/documents/pension-plan-2022.pdf - Page 5, https://www.thekrogerco.com/documents/pension-plan-2023.pdf - Page 12, https://www.thekrogerco.com/documents/pension-plan-2024.pdf - Page 15, https://www.thekrogerco.com/documents/401k-plan-2022.pdf - Page 8, https://www.thekrogerco.com/documents/401k-plan-2023.pdf - Page 22, https://www.thekrogerco.com/documents/401k-plan-2024.pdf - Page 28, https://www.thekrogerco.com/documents/rsu-plan-2022.pdf - Page 20, https://www.thekrogerco.com/documents/rsu-plan-2023.pdf - Page 14, https://www.thekrogerco.com/documents/rsu-plan-2024.pdf - Page 17, https://www.thekrogerco.com/documents/healthcare-plan-2022.pdf - Page 23