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

Enhanced Estate and Gift Tax Benefits for Parker-Hannifin Employees in 2024

Healthcare Provider Update: Healthcare Provider for Parker-Hannifin Parker-Hannifin, a leading global manufacturer of motion and control technologies, provides employee healthcare coverage primarily through major insurance networks such as UnitedHealthcare and Anthem. These providers are known for their extensive networks and resources, allowing employees of Parker-Hannifin to access necessary healthcare services efficiently. Potential Healthcare Cost Increases in 2026 As the healthcare landscape shifts, Parker-Hannifin and its employees may face significant healthcare cost increases in 2026. With anticipated record hikes in Affordable Care Act (ACA) premiums, certain states could see upsurges exceeding 60%, driven by a mix of higher medical costs and the potential expiration of enhanced federal premium subsidies. The Kaiser Family Foundation warns that without congressional action, approximately 92% of policyholders could experience over 75% increases in out-of-pocket premiums, which could strain the financial resources of many employees already navigating rising living costs. Click here to learn more

As we transition into 2024, the landscape of federal gift, estate, and generation-skipping transfer (GST) tax laws has shifted significantly due to major inflation adjustments. For Parker-Hannifin employees focusing on their financial strategies, these changes present valuable opportunities for enhancing intergenerational wealth transfer and achieving greater tax efficiency.

The Internal Revenue Service (IRS) has raised the lifetime exemption levels for the federal estate tax and the GST tax considerably. Individual exemptions have grown from $12.92 million in 2023 to $13.61 million, a $690,000 increase. Similarly, for married couples, the exemption has surged from $25.84 million to $27.22 million. These adjustments facilitate significant wealth transfers to heirs or direct gifts to grandchildren (via GSTs) without incurring federal estate or GST taxes.

The aligned increase in both the estate tax exemption and the generation-skipping tax exemption allows for direct asset transfers to grandchildren or into trusts for their benefit, helping families circumvent the double taxation of estate taxes on subsequent generations.

However, these augmented exemption amounts are set to expire on December 31, 2025, unless new legislation extends them. Initially quadrupled by the Tax Cuts and Jobs Act of 2017, these exemptions will nearly halve if not renewed. This impending reduction underscores the importance of proactive estate and gift planning soon.

For 2024, the federal gift tax annual exclusion has also seen a roughly 6% increase to $18,000 per recipient, up from $17,000 the previous year. This enables Parker-Hannifin employees to devise strategic gifting plans that preserve estate value and promote wealth transfer between generations.

With the 2025 sunset date approaching, maximizing these increased exemptions is crucial to save on taxes. Consider utilizing the annual gift tax exclusion, which allows up to $18,000 per recipient in 2024 without impacting your lifetime estate or gift tax exemptions. Additionally, direct payments to medical providers for healthcare or educational institutions for tuition are exempt from gift taxes.

Including a gift tax return (IRS Form 709) is essential for contributions exceeding the annual exclusion, as part of comprehensive estate planning.

Parker-Hannifin employees should also explore trust-based strategies like lifetime irrevocable trusts, which remove assets from the taxable estate, and Grantor Retained Annuity Trusts (GRATs), where the grantor receives annuity payments for a set period before the remainder passes to beneficiaries, potentially tax-free.

Spousal Lifetime Access Trusts (SLATs) are another option, allowing one spouse to leverage their gift tax exemption to establish a trust for the other, who then accesses the trust's assets.

Engaging with financial advisors is crucial to navigate the complexities of state-specific estate and gift tax laws, which vary widely and affect overall tax obligations and estate planning strategies.

As federal tax exemptions are about to sunset, this is a critical time for Parker-Hannifin employees to review and possibly revise their estate and gifting strategies. These calculated decisions can lead to more efficient wealth transfer to future generations and significant tax savings.

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When making these choices, it is advisable for professionals and retirees to consult with advisors to formulate their plans in light of current tax rules and potential future changes.

For Parker-Hannifin employees retiring or nearing retirement, consider establishing a Qualified Personal Residence Trust (QPRT) in 2024. A QPRT allows homeowners to transfer their residence into a trust, residing there for a designated period, potentially reducing the taxable value of their estate. This strategy is particularly valuable ahead of potential reductions in exemption amounts post-2025, enabling high-value assets to be transferred at a reduced tax cost.

Like a gardener preparing for a fruitful season, the upcoming changes in inheritance and gift tax laws in 2024 are an excellent opportunity for Parker-Hannifin employees to strategically transfer wealth and make impactful gifts. The expanded exemption levels, akin to fertile soil, facilitate the management of estates to minimize tax implications and maximize growth for future generations. Acting now, before these favorable conditions sunset in 2025, is like planting a crop at the optimal time to ensure a bountiful harvest for years to come.

How can employees of Parker-Hannifin Corporation effectively calculate their pension estimates, and what factors should they consider when determining their expected retirement benefits from the Plan? This question aims to explore the details behind Final Average Monthly Compensation, vesting service, and the impact of different retirement ages on the monthly benefit calculations.

Employees can estimate their pension benefits using a compensation-based formula. They should consider factors such as Final Average Monthly Compensation (based on their highest five consecutive years of earnings), years of benefit service, and the Social Security Covered Compensation. Employees can use the pension estimation tools available at www.YourParkerBenefits.com to calculate their retirement benefits considering different retirement ages(Parker-Hannifin_Corpora…).

What are the eligibility requirements for employees of Parker-Hannifin Corporation to participate in the retirement benefits Plan, and how does the completion of vesting service affect access to defined benefits? This inquiry will delve into the specifics of one-year vesting service requirements, definitions of full-time versus part-time status, and any exceptions that may apply.

To be eligible for the retirement plan, employees must complete one year of vesting service. Vesting service counts employment periods with Parker and includes specific leaves of absence. Full-time, part-time, and temporary employees are eligible. Exceptions exist, such as for co-operative employees, who do not become plan participants(Parker-Hannifin_Corpora…).

In what ways does Parker-Hannifin Corporationâ€™s retirement plan integrate with Social Security benefits, and how might this impact employees' overall retirement income planning? This question should encourage discussion on how both sources of income can be strategically coordinated for optimal financial stability in retirement.

Pension benefits under the plan are paid in addition to Social Security. The integration involves calculating benefits based on both Final Average Monthly Compensation and Social Security Covered Compensation. This coordination ensures that employees have a combined source of income during retirement(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

What options do employees of Parker-Hannifin Corporation have for electing different forms of retirement benefit payments, and how should they weigh the pros and cons of each option? This question will provide insight into the various payment methods, including Joint and Survivor Options versus Life Only benefits, and factors that influence these decisions.

Employees can choose between multiple forms of benefit payments, including a Life Only benefit or Joint and Survivor Options (50%, 75%, or 100%). The decision on which option to choose should depend on factors like marital status, desired survivor benefits, and potential reduction in monthly payments for electing survivor options(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

How does the retirement benefits Plan at Parker-Hannifin Corporation ensure that employees are informed about any potential amendments or changes that might affect their retirement benefits? This question focuses on the communication strategies employed by the company to relay critical information to employees regarding plan modifications and participant rights.

Parker-Hannifin uses formal communication methods to ensure employees are informed about plan changes, such as amendments or terminations. This includes notifications through the Benefits Service Center and relevant updates provided on the Parker Benefits website(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

What implications does a Qualified Domestic Relations Order (QDRO) have for employees of Parker-Hannifin Corporation, and how can participants ensure compliance with legal requirements regarding benefits division in divorce situations? This question seeks an understanding of the legal framework surrounding QDROs and the steps employees should take to protect their benefits.

A QDRO allows for the division of pension benefits in cases of divorce or legal separation. Parker-Hannifin employees can work with QDRO Consultants to ensure compliance with legal requirements. The order will direct the plan to distribute a portion of the employee’s pension to an alternate payee, such as a spouse or dependent(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

How should employees of Parker-Hannifin Corporation approach the retirement process if they are currently receiving Long Term Disability benefits, and what adjustments might they need to consider during this transition? This question aims to clarify how the overlap of disability and retirement benefits is managed under the Plan.

Employees receiving Long-Term Disability (LTD) benefits will have their LTD payments reduced by the amount of any pension benefits they start receiving. Employees should coordinate their retirement process with the Benefits Service Center to ensure a smooth transition from LTD to retirement benefits(Parker-Hannifin_Corpora…).

What options for early retirement benefits are available to employees of Parker-Hannifin Corporation, and what critical factors should they consider before deciding to retire before the normal retirement age? This question will highlight the age and service requirements and the impact of early retirement on monthly benefit amounts.

Employees can retire early starting at age 55 with at least 10 years of vesting service. However, benefits are reduced for each month before the normal retirement age of 65, at a rate of 0.5% per month. Early retirement also includes options like Temporary Pension Supplement to cover medical expenses(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

What steps should Parker-Hannifin Corporation employees take to ensure they receive accurate and timely benefit payments upon retirement, including any necessary applications or paperwork? This question covers the procedural aspects of commencing benefit distributions and highlights the importance of adhering to federal regulations regarding distributions.

Employees must apply for retirement benefits through the Benefits Service Center by completing necessary forms, including proof of age and marital status. Benefits generally begin the month following the retirement date or the completion of the application, and federal regulations require benefits to start no later than April 1 following age 70½(Parker-Hannifin_Corpora…)(Parker-Hannifin_Corpora…).

How can employees of Parker-Hannifin Corporation contact the Total Rewards Department to get personalized assistance regarding their retirement benefits and related inquiries? This question focuses on the specific contact details and resources available for employees seeking further clarification on their retirement planning and benefits management.

For personalized assistance, employees can contact the Benefits Service Center at 1-800-992-5564. This service provides answers to questions about retirement benefits, plan participation, and pension estimates(Parker-Hannifin_Corpora…).