/General/General%201.png?width=1280&height=853&name=General%201.png)
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
FedEx employees should delay Social Security claims and use their 401(k) as a bridge to maximize their monthly benefits amid volatile economic times, 'he said.
'For FedEx employees approaching retirement, delaying Social Security benefits and using a phased withdrawal from 401(k) plans can provide long-term retirement income optimization.'
In this article we will discuss:
-
1. Use of a 'Social Security bridge strategy' to maximize retirement income.
-
2. Delayed Social Security benefits affect monthly payments.
-
3. Required Minimum Distributions (RMDs) in retirement planning for FedEx professionals.
Volatile markets, high inflation, and complicated financials require many FedEx personnel to make strategic judgments about their retirement savings. One major determination involves the start of Social Security benefits. It is generally advised to delay these benefits until one reaches Full Retirement Age (FRA) to optimize the monthly disbursement. Yet this is not always consistent with the more concrete financial realities or strategic considerations that many face when approaching retirement from FedEx.
This 'Social Security bridge' strategy is becoming popular with FedEx employees nearing retirement age. Utilizing a phased retirement income plan utilizing assets from 401(k) plans or analogous retirement savings, this methodology allows people to delay filing for Social Security benefits until they reach their FRA - 70 years old - whichever comes first.
Conventionally, the strategy involves starting withdrawals from 401(k) plans when you can without penalty - which is around 59 and a half years old. That is, withdrawals cannot exceed Social Security benefits beginning at age 62, when they become payable.
New studies from the Boston College Center for Retirement Research show how such an approach might benefit some people. It says some might use their 401(k) assets to bridge the gap until they can qualify for Social Security benefits and increase their ultimate monthly income. This work concludes that participants become more interested in a workplace-sponsored bridging program when they learn more about it. Rather than delay filing claims, a Social Security bridge might provide a steady income at or above the expected benefit levels for life while increasing those benefits.
As of September 2022, the Investment Company Institute estimates more than 71 million active participants had 401(k) accounts. Together their assets reached more than USD 6.3 trillion. This huge retirement resource affects the current discourse on retirement strategies.
Delayed Social Security benefits certainly have financial rewards. Now, the regulations require that any delayed Social Security claim equal 8% of the final monthly benefit for each year from the FRA to age 70. Thus, at 67, if someone deferred benefit filing until 70, their monthly contributions would increase by 24%.
An example:
the highest monthly benefits for claims submitted in 2023 are listed as follows:
-
Age 62 Claims: USD 3,627 claims at full retirement age (66 years and four months for 1956 born people and 66 years and six months for 1957 born people) are eligible for USD 3,627.$4,555 for age 70 claims.
Rather, as of March 2023, the mean Social Security benefit was estimated at USD 1,833 monthly. In addition, Social Security and Supplemental Security Income disbursements are to be adjusted by 3.2% to reflect rising living costs beginning in January 2024.
And despite these monetary incentives, postponing benefits is not without psychological and strategic complexities. One notable cognitive obstacle to early withdrawal is that many people use 401(k) accounts as their primary way to save for retirement. Prominent financial analysts like Suze Orman have long cautioned against prematurely withdrawing from 401(k) plans before beginning to retire.
But 401(k) savings are limited by the permanent nature of Social Security benefits. While long-term problems with the Social Security program are legitimate, a 401(k) bridge might be a smart move to secure a larger Social Security benefit. Taking a claim at age 70 instead of 62 can boost monthly benefits to a level comparable to what can be expected from 401(k) investments - which are generally administered more cautiously as people age.
Social Security is unusually stable compared to 401(k) plans in that the benefit amount is set by the age of the claimant and does not change. Yet such a bridging strategy has its risks too. At least 38 states tax retirement distributions, which creates tricky circumstances for people looking to use 401(k) assets for estate planning.
Anxieties that projections show will likely wipe out the Social Security program by 2035 also explain why some people choose to file claims deferred. However, such claims should generally not be prematurely asserted because legislative steps are expected to protect the program's viability.
Another factor FedEx personnel approaching retirement should be aware of:
Required Minimum Distributions (RMDs) on 401(k) plans. The IRS requires that people start receiving RMDs from their retirement accounts at age 72 by 2020. This regulation may affect how 401(k) savings are used to bridge Social Security gaps. The increased tax classification of retirees under RMDs could impact overall financial planning (IRS, June 2021). This makes RMDs important to consider when deciding to postpone Social Security benefits.
A financial advisor may be of help because these decisions are often quite complex. Data from the Federal Reserve Board show that only 40% of non-retirees feel confident about their retirement assets. This finding suggests that many FedEx professionals might profit from seeking out professional help with retirement planning issues.
Potential problems with economic recessions and high inflation call for retirement planning. Communications with a financial advisor through online tools such as WiserAdvisor may provide specialized guidance toward achieving a desired retirement age, investing wisely, and making sound decisions. Starting such planning early can be worthwhile, as it gives assurance and a course for the future.
The act of strategically planting a tree is like waiting to receive Social Security benefits by taking money from a 401(k). In the same way, a sapling gains strength and height with age to provide more shade and value, the extent to which you can maintain them before harvesting adds to your retirement benefits. It's like pruning a branch to help the tree grow - early withdrawal from a 401(k) is a sacrifice for future profits. Patience and foresight create this strong, fully-canopied tree (retirement fund) in this ecosystem for your autumn days of solace and protection.
Added Fact:
Changing tax law may add new considerations for 401(k) and Social Security strategies for FedEx professionals approaching retirement. The SECURE Act of 2019 raises the age for Required Minimum Distributions (RMDs) from 70 1/2 to 72, giving retirement funds extra time to grow tax-deferred. This could affect when to start Social Security benefits, since the delayed RMD start might fit a strategy of deferring Social Security claims in exchange for higher monthly benefits. The SECURE Act requires people approaching retirement to rethink their withdrawal strategies to maximize retirement income.
Added Analogy:
Retirement planning for FedEx professionals is like a captain making a long voyage. 401(k) is the ship, filled with provisions for the trip, and Social Security benefits are the trade winds that can push the vessel forward faster. Choosing to withdraw early from 401(k) reserves is like the captain using stored sails to catch early, weaker breezes to save for the stronger, later winds that make the journey more efficient in the long haul.
By delaying Social Security drawdown until full retirement age or later, the captain makes sure that when the sails are unrolled, they catch the strongest winds, which makes for a more steady and abundant ride through retirement years. Having this strategic patience allows the journey to stretch more easily, because the stronger trade winds of later-life Social Security benefits will provide more robust support than the early gusts that were tempting but not as fruitful.
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!
Sources:
1. Center for Retirement Research at Boston College. 'A Social Security Bridge Option Would Help Reduce Early-Claiming Penalties for Those with Retirement Savings.' Center for Retirement Research at Boston College , economicpolicyresearch.org . Accessed 28 Feb. 2025.
2. Kiplinger. 'How the Social Security Bridge Strategy Works.' Kiplinger , kiplinger.com . Accessed 28 Feb. 2025.
3. ASPPA. 'Is There Interest in a Social Security Bridge?' ASPPA , asppa-net.org . Accessed 28 Feb. 2025.
4. Kiplinger. 'Increase Your Social Security Payments up to $2,187 per Month.' Kiplinger , kiplinger.com . Accessed 28 Feb. 2025.
5. Morningstar. 'Maybe You Shouldn't Delay Taking Your Social Security Benefits After All.' Morningstar , morningstar.com . Accessed 28 Feb. 2025.
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.
-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)