<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=314834185700910&amp;ev=PageView&amp;noscript=1">

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

Learn More

Lincoln National Retirees: Don't Make These 6 Common Tax Return Mistakes

image-table

Healthcare Provider Update: Healthcare Provider for Lincoln National: Lincoln National Corporation does not directly provide healthcare services. Instead, it operates as a financial services company that offers various insurance and investment solutions. For healthcare coverage, Lincoln National collaborates with health insurance providers like Aetna for its employee benefits and health-related products. Potential Healthcare Cost Increases in 2026: Healthcare costs are projected to rise significantly in 2026, driven by factors such as inflation in medical care and large anticipated increases from major insurers. Premiums for Affordable Care Act (ACA) marketplace plans could soar by over 20% on average, with some states facing hikes that exceed 60%. The potential expiration of enhanced premium subsidies will further exacerbate the situation, leading to a staggering increase of over 75% in out-of-pocket costs for many enrollees. As a result, consumers will need to navigate these challenges carefully, focusing on proactive strategies to manage their healthcare expenses effectively. Click here to learn more

When it comes to financial planning, especially for Lincoln National employees who are nearing or through retirement, tax management is essential to ensuring a comfortable and financially stable future. Due to the intricacy of tax regulations, Lincoln National retirees and their advisors may fail to recognize chances for tax savings or, on the other hand, may make mistakes that result in an increased tax liability. This post explores six common errors seen on retirees' tax returns and provides advice on how to potentially avoid them and make the most out of your tax plan.


Myths Regarding Deductions

It's common to misunderstand the choice between choosing the standard deduction versus itemizing deductions. Due to changes in tax legislation after 2018, Lincoln National retirees like the hypothetical John and Linda may not benefit from itemizing deductions even though they have a mortgage. This is a common circumstance. It is important to determine if the total of all possible itemized deductions—medical costs that are greater than 7.5% of AGI, mortgage interest, local and state taxes, and charitable contributions—exceeds the standard deduction limit, which for couples over 65 in 2023 was over $30,000.

Distributions from Qualified Charities: An Unused Possibility

Qualified Charitable Distributions (QCDs) are a useful tactic for Lincoln National retirees who want to give to charity in an effective manner. This is especially true for people who no longer itemize deductions. But eligibility starts at seventy-five, and one common mistake is to declare these distributions incorrectly on tax returns. Accurate Form 1040 documentation is necessary to guarantee that these contributions are acknowledged and optimized for taxation.


Unexpected Tax Obligations

Many Lincoln National retirees with inefficient investment portfolios or phantom gains have unanticipated tax problems. For example, even in years when the market is down, capital gains distributed by mutual funds might result in large tax bills. Investing in individual stocks or Exchange-Traded Funds (ETFs) in taxable accounts can provide investors with greater control over their tax obligations and the flexibility to choose when to realize gains.

Ignoring Cost Basis in Stock Transactions

Unnecessary tax burdens may result from selling equities without knowing the cost basis or failing to report it. Investments that were purchased before to the 2011 mandate requiring custodians to monitor this data often do not have a documented cost basis, which could result in the entire selling value being subject to gain taxation. Tax ramifications can be reduced by determining and correctly disclosing the cost basis or by taking these assets into account when making charitable contributions.

Medicare Premiums Tied to Income

The income-based premiums for Medicare Parts B and D are based on the income recorded two years prior to the current year. By submitting an SSA-44 form, Lincoln National retirees who are going through a major change in income—such as going into retirement—may be eligible for modified premiums. Unnecessary increases in Medicare premiums can be potentially avoided with awareness and proactive management of income levels.

Making Use of Tax Valleys

This 'tax valley,' where lower income levels offer potential for tax savings, is the period of time between retirement and required withdrawals from retirement plans. Tax advantages that are not accessible during higher income periods can be obtained by strategies like Roth conversions, taking distributions, or realizing capital gains during these years.

Featured Video

Articles you may find interesting:

Loading...


In conclusion, even though handling tax planning and compliance may seem overwhelming, by being proactive and aware of typical pitfalls, one may greatly improve their financial future. Lincoln National retirees have many options to reduce their tax obligations and safeguard their financial resources for the future. These options include fine-tuning deduction strategies, maximizing charitable contributions, managing investment portfolios with an eye toward tax implications, accurately reporting all transactions, and strategically managing income to influence Medicare premiums and tax rates.

The effect of a retiree's place of residence on their tax obligations is one tactic that is frequently disregarded. Significant tax benefits are available to retirees in some jurisdictions, such as no state income tax, Social Security income exemptions, and advantageous treatment for pension and retirement account withdrawals. Relocating to a state with low taxes may save you a lot of money on taxes. Assessing state tax laws should be a crucial step in retirees' tax planning process as they make financial plans for the future. This is particularly important to take into account because it can impact estate planning techniques as well as retirement income in general. According to AARP's February 2023 report, 'States with the Best Tax Breaks for Retirees,'

Managing your retirement tax returns is like sailing a ship across the ocean. To safeguard their financial security, retirees must navigate the intricate waters of tax laws and regulations, much as an experienced sailor must be aware of shifting winds, currents, and potential hazards. Errors such as misjudging the impact of investment decisions on taxes, mishandling stock sales, maximizing charitable distributions, underestimating the influence of income on Medicare premiums, and not taking advantage of lower tax years are comparable to missing the good times, hitting undiscovered obstacles, or deciding on an ineffective path. To ensure a prosperous voyage during the retirement years, every action on this journey demands foresight, planning, and a grasp of the surrounding environment to maximize benefits and potentially avoid dangers.

Not Individualized tax advice. Discuss your situation with a qualified tax professional.

What is the primary purpose of Lincoln National's 401(k) Savings Plan?

The primary purpose of Lincoln National's 401(k) Savings Plan is to help employees save for retirement by providing tax-advantaged investment options.

How can employees at Lincoln National enroll in the 401(k) Savings Plan?

Employees at Lincoln National can enroll in the 401(k) Savings Plan through the company’s online benefits portal or by contacting the HR department for assistance.

Does Lincoln National match employee contributions to the 401(k) Savings Plan?

Yes, Lincoln National offers a matching contribution to the 401(k) Savings Plan, which helps employees maximize their retirement savings.

What types of investments are available in Lincoln National's 401(k) Savings Plan?

Lincoln National's 401(k) Savings Plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

What is the minimum contribution percentage for Lincoln National's 401(k) Savings Plan?

The minimum contribution percentage for Lincoln National's 401(k) Savings Plan is typically set at 1% of an employee's salary, but employees are encouraged to contribute more if possible.

Can employees at Lincoln National take loans against their 401(k) Savings Plan balance?

Yes, Lincoln National allows employees to take loans against their 401(k) Savings Plan balance under certain conditions.

What happens to my 401(k) Savings Plan if I leave Lincoln National?

If you leave Lincoln National, you can choose to roll over your 401(k) Savings Plan balance into an IRA or another qualified retirement plan, or you may withdraw the funds, subject to taxes and penalties.

How often can employees change their contribution amounts to Lincoln National's 401(k) Savings Plan?

Employees at Lincoln National can change their contribution amounts to the 401(k) Savings Plan at any time, subject to certain administrative deadlines.

Are there any fees associated with Lincoln National's 401(k) Savings Plan?

Yes, Lincoln National's 401(k) Savings Plan may have administrative fees and investment-related fees, which are disclosed in the plan documents.

What educational resources does Lincoln National provide to help employees understand the 401(k) Savings Plan?

Lincoln National offers educational resources such as workshops, online tools, and one-on-one consultations to help employees understand and manage their 401(k) Savings Plan.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Lincoln National offers a comprehensive retirement package, including a pension plan and the LNC Employees' 401(k) Savings Plan. The pension plan, also known as a defined benefit plan, provides employees with a guaranteed retirement income based on their years of service and salary. The exact formula for the pension plan includes a specific percentage of the final average salary multiplied by the number of years of service. The minimum service requirement is typically five years, and the pension benefits become fully vested at this point. Employees must meet certain age qualifications, generally beginning at age 55 with early retirement options. The 401(k) Savings Plan, also referred to as a defined contribution plan, allows employees to contribute a portion of their pre-tax salary. Lincoln National matches these contributions up to a certain percentage. In 2022, 2023, and 2024, Lincoln enhanced its 401(k) offerings by providing more investment options and improved online tools to help employees manage their retirement savings. Employees become eligible for the 401(k) plan after completing one year of service and reaching age 21. The LNC Employees' 401(k) Savings Plan is notable for its flexibility, allowing participants to make both pre-tax and Roth contributions​ (lincolnfinancial)​ (Business Wire).
Lincoln National Corporation has experienced significant restructuring efforts in 2023 and 2024, including layoffs and changes to its workforce. In early 2024, the company announced a 5% reduction in its workforce, impacting employees across various segments. These layoffs are part of a broader strategic realignment aimed at addressing the company's financial difficulties, which have been compounded by external pressures such as inflation, regulatory changes, and market volatility. Additionally, Lincoln National saw a substantial financial loss in the fourth quarter of 2023, reporting a net loss of $1.2 billion. This loss led to further emphasis on cost-cutting measures, including benefit restructuring, workforce reductions, and pension adjustments​ (S&P Global)​ (AM Best).
For Lincoln National, both employee stock options and Restricted Stock Units (RSUs) are made available as part of their equity compensation plans to incentivize and retain key employees. Lincoln National offers RSUs to employees, with vesting schedules that typically follow a multi-year plan, often with a cliff period followed by gradual vesting. This aligns with common industry practices, where RSUs are granted without an upfront purchase requirement, and they are taxed as ordinary income when they vest​ (Zajac Group)​ (Facet). RSUs at Lincoln National are distributed based on performance and employment status, with eligibility generally extending to full-time employees, directors, and some high-level contractors​ (MarketBeat). In addition to RSUs, Lincoln National also offers Non-Qualified Stock Options (NQSOs). These stock options provide employees the right to purchase company shares at a fixed strike price, with taxation occurring when the options are exercised and based on the difference between the exercise price and the fair market value​ (Facet)​ (Brooklyn Fi). Stock options are generally awarded to senior employees, allowing them to benefit from any increase in Lincoln National’s stock price over time.
Lincoln National offers a robust set of healthcare benefits for its employees, which has seen significant updates over the past few years. In 2023, Lincoln National continued to provide comprehensive health coverage, including medical, dental, and vision insurance, through various plan options. The company places particular emphasis on preventive care, with terms such as “Health Savings Account (HSA),” “Preferred Provider Organization (PPO),” and “Flexible Spending Account (FSA)” frequently used in their communications​ (lincolnfinancial). Additionally, Lincoln National promotes its Employee Assistance Program (EAP), which offers confidential support for both personal and professional challenges. With healthcare costs rising by approximately 5.4% in 2024, Lincoln National, like many employers, has been working to contain expenses while still offering high-quality healthcare options​ (Mercer | Welcome to brighter)​ (Mercer | Welcome to brighter). The importance of Lincoln National’s healthcare benefits cannot be overstated, especially given the current economic and political environment. Rising inflation and healthcare costs have pressured employers to reevaluate their healthcare strategies. Lincoln National’s focus on maintaining affordable care options, despite these challenges, highlights its commitment to employee well-being. This approach is crucial for retaining talent and managing healthcare costs effectively in a turbulent economic landscape, where investments in employee health contribute to long-term organizational success. The company's proactive stance in managing healthcare benefit expenses is a strategic response to both economic pressures and evolving healthcare legislation​ (lincolnfinancial)​ (Mercer | Welcome to brighter).
New call-to-action

Additional Articles

Check Out Articles for Lincoln National employees

Loading...

For more information you can reach the plan administrator for Lincoln National at , ; or by calling them at .

https://intellizence.com/insights/layoff-downsizing/leading-companies-announcing-layoffs-and-hiring-freezes/ https://www.thelayoff.com/t/1qkG9jdL https://stockanalysis.com/stocks/lnc/company/ https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/lincoln-financial-s-stock-drops-amid-layoffs-q4-2023-net-loss-80363396 https://www.consultrms.com/ https://www.retirementplanblog.com/ https://www.businesswire.com/news/home/20220106005614/en/Lincoln-Financial-Launches-New-Retirement-Plan-Participant-Experience https://zajacgrp.com/insights/a-comparison-of-employee-stock-options-vs-restricted-stock-units/ https://facet.com/equity/understanding-restricted-stock-units-rsus-taxes-vesting-schedules-pros-cons/ https://facet.com/equity/understanding-restricted-stock-units-rsus-taxes-vesting-schedules-pros-cons/ https://www.mercer.com/en-us/solutions/health-and-benefits/research/national-survey-of-employer-sponsored-health-plans/ https://www.fidelity.com/learning-center/personal-finance/retirement/company-stock https://zambrifinancial.lpl.com/resource-center/retirement/net-unrealized-appreciation-nua-explained https://carlsoncap.com/articles/nua-net-unrealized-appreciation/ https://fortunefinancialadvisors.com/blog/ https://www.milliman.com/en/insight/2023-lump-sums-defined-benefit-plans-much-lower-as-interest-rates-rise https://www.foxrothschild.com/publications/interest-rate-hikes-present-challenge-for-fully-funded-pension-plans https://www.planadviser.com/ https://www.wealthmanagement.com/ https://www.thelayoff.com/t/1qMplmf1 https://www.kiplinger.com/article/retirement/t012-c032-s014-a-beginner-s-guide-to-deferred-compensation.html https://finviz.com/quote.ashx?t=LNC&p=d https://www.marketbeat.com/stocks/NYSE/LNC/ https://ca.finance.yahoo.com/quote/LNC/

*Please see disclaimer for more information

Relevant Articles

Check Out Articles for Lincoln National employees