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Are Fifth Third Bancorp Employees Prepared for Potential Tax Changes Ahead?

Healthcare Provider Update: Healthcare Provider for Fifth Third Bancorp: Fifth Third Bancorp primarily offers health benefits to its employees through Aetna, one of the largest health insurance providers in the United States. Aetna provides a range of health plans, including medical, dental, and vision coverage, tailored to meet the needs of Fifth Third Bancorp's workforce. Potential Healthcare Cost Increases in 2026: In 2026, the healthcare landscape is expected to see significant cost increases, with the Affordable Care Act (ACA) marketplace premiums projected to rise sharply, potentially exceeding 60% in some states. This surge is driven by a combination of expiring federal premium subsidies, which could result in out-of-pocket costs skyrocketing by over 75% for millions of enrollees. With higher medical costs, including hospital and drug expenses, coupled with double-digit rate hikes from major insurers, many consumers may find themselves priced out of affordable coverage options, necessitating strategic planning for their healthcare needs in the coming years. Click here to learn more

With the passage of the One Big Beautiful Bill Act (OBBBA, signed July 4, 2025), Fifth Third Bancorp employees must navigate these changes strategically,' says Brent Wolf of The Retirement Group, a division of Wealth Enhancement Group. 'It is therefore important to consider Roth conversions, tax-loss harvesting, and estate planning in order to maintain financial health in the changing tax environment.'

The author of this paper agrees that Fifth Third Bancorp employees who are likely to be affected by the possible change in tax laws should make it a point to meet their financial advisors to see how they can be best prepared for the future,' suggests Kevin Landis from The Retirement Group, a division of Wealth Enhancement Group. 'Some of the strategies that may be useful in the current environment and which may become particularly valuable as the tax laws change include Roth conversions and tax-loss harvesting.'

In this article we will discuss:

The effects that recent tax legislation may have on Fifth Third Bancorp employees under the One Big Beautiful Bill Act (OBBBA).
Strategic financial moves such as Roth conversions, tax-loss harvesting, and gifting to minimize tax exposures in wait of possible tax reforms.
The role of personal financial planning in the context of potential legislative modifications and their implications for retirement planning.

The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, made many key tax provisions permanent. The OBBBA locked in lower tax brackets, raised the standard deduction ($15,750 for single filers, $31,500 for joint filers), increased the SALT deduction cap to $40,000 for incomes under $500,000, and permanently raised the federal estate and gift tax exemption to $15 million per person, indexed for inflation.

The OBBBA also introduced new provisions, including a temporary additional deduction of $6,000 for taxpayers age 65 and older (effective 2025 through 2028) and a deduction for eligible tip income up to $25,000 per year. These changes create meaningful planning opportunities for employees approaching or in retirement.

Fifth Third Bancorp employees who are thinking about tax strategies may want to consider the following strategies in light of possible higher taxes:

Conversions to Roth:

Moving your 401(k) or IRA to a Roth 401(k) or Roth IRA may be advantageous if you anticipate higher taxes. This move allows for tax-free growth and distributions, controlling taxes in case of higher future taxes. Unlike other Roth conversions, the “backdoor” Roth entails contributing nondeductible amounts to a traditional IRA and then converting to a Roth IRA.

Tax Losses:

If you expect to pay more in capital gains taxes, you can sell losing investments and replace them with like investments to offset gains and thus reduce your taxes. The balance can be used to reduce taxable income up to $3,000 each year, any remaining loss being carried forward.

Gifting and Estate Planning:

The estate and gift tax exemption has been permanently extended under OBBBA -- no sunset or reduction is scheduled. With the annual gift tax exemption at $19,000 per recipient (as of 2026), there are effective ways to reduce the value of the estate and gift it without incurring any tax. It is crucial to document everything, particularly if the gift is larger than the stated limit.

Qualified Longevity Annuities (QLACs):

QLACs are perfect for deferring income up to the age of 85 that may help to address potential future higher tax brackets. Qualified retirement plans include those that fund the QLAC, which defers taxation until distributions are made and are not reportable as required minimum distributions, with a limitation of $200,000.

In this context, it is crucial for the Fifth Third Bancorp employees to get ready for the possible changes in the tax laws. Some of the current strategies include Roth conversions, tax-loss harvesting, and strategic gifting, which are very useful based on the current laws. This is because the situation is different for every single Fifth Third Bancorp employee, and therefore the advice of a tax or financial expert is crucial in the current tax environment.

The Secure Act 2.0, which took effect in December 2022, also affects those near retirement age. This act increased the age of RMDs from retirement accounts, allowing for more tax deferred growth and possibly assistance in managing taxes in higher brackets. The OBBBA's permanent provisions make Roth conversion strategies, estate gifting, and tax-loss harvesting more valuable than ever for long-term retirement planning.

The opportunities that can be explored based on the understanding of Roth conversions, tax-loss harvesting, estate planning, and the benefits of Qualified Longevity Annuity Contracts (QLACs) are encountered in an attempt to maximize your retirement funds in light of potential tax increases. It is advisable to stay informed and proactive to protect your financial position, as tax and healthcare policy continues to evolve.

IRA traditional account owners should consider certain pros and cons of converting their accounts to Roth IRA. The major ones include paying taxes on the amount being converted at the time of conversion, the rules on withdrawals from a Roth IRA, and the age and annual contribution limits on contributing to a Roth IRA. For instance, if you are required to take a RMD in the year that you convert, you must take it before converting to a Roth IRA. The following is an investment risk statement:

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Sources:

1. Investopedia: 'One Big Beautiful Bill Act (OBBBA): Tax Changes Explained.' Investopedia, www.investopedia.com . Accessed 4 Feb. 2025.

2. Thrivent: 'One Big Beautiful Bill Act (OBBBA): Tax Moves to Consider if You Are Nearing or in Retirement.' Thrivent, 20 Feb. 2024, www.thrivent.com . Accessed 4 Feb. 2025.

3. Pacific Life Annuities: 'One Big Beautiful Bill Act (OBBBA) Extensions -- Key Tax Moves for Retirees.' Pacific Life Annuities, www.annuities.pacificlife.com . Accessed 4 Feb. 2025.

4. J.P. Morgan Asset Management: Conrath, Michael, and Steve Rubino. '2024 Guide to Retirement.' J.P. Morgan Asset Management, 6 Mar. 2024, am.jpmorgan.com.

5. IRS: 'One, Big, Beautiful Bill Provisions.' Internal Revenue Service, irs.gov/newsroom/one-big-beautiful-bill-provisions.

What type of retirement savings plan does Fifth Third Bancorp offer to its employees?

Fifth Third Bancorp offers a 401(k) retirement savings plan to its employees.

How can employees of Fifth Third Bancorp enroll in the 401(k) plan?

Employees of Fifth Third Bancorp can enroll in the 401(k) plan through the company’s HR portal or by contacting the benefits department for assistance.

Does Fifth Third Bancorp match employee contributions to the 401(k) plan?

Yes, Fifth Third Bancorp offers a matching contribution to employees who participate in the 401(k) plan, subject to certain limits.

What is the maximum contribution limit for the 401(k) plan at Fifth Third Bancorp?

The maximum contribution limit for the 401(k) plan at Fifth Third Bancorp follows the IRS guidelines, which may change annually. Employees should check the latest limits for the current year.

Can employees of Fifth Third Bancorp take loans against their 401(k) savings?

Yes, Fifth Third Bancorp allows employees to take loans against their 401(k) savings, subject to the plan’s rules and regulations.

What investment options are available in the Fifth Third Bancorp 401(k) plan?

The Fifth Third Bancorp 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

Is there a vesting schedule for the employer match in the Fifth Third Bancorp 401(k) plan?

Yes, Fifth Third Bancorp has a vesting schedule for the employer match, which determines how much of the matched funds employees are entitled to based on their years of service.

How often can employees change their contribution amounts to the Fifth Third Bancorp 401(k) plan?

Employees of Fifth Third Bancorp can change their contribution amounts to the 401(k) plan at any time, subject to the plan's rules.

What happens to my Fifth Third Bancorp 401(k) if I leave the company?

If you leave Fifth Third Bancorp, you can choose to roll over your 401(k) balance to another retirement account, cash out, or leave it in the Fifth Third Bancorp plan if allowed.

Are there any fees associated with the Fifth Third Bancorp 401(k) plan?

Yes, there may be fees associated with managing the Fifth Third Bancorp 401(k) plan, which can vary based on investment choices and administrative costs.

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

Fifth Third Bancorp offers a 401(k) Profit Sharing Plan called the MB Financial, Inc. 401(k) Profit Sharing Plan, which is managed through Vanguard. This plan covers 4,032 employees and is part of Fifth Third Bancorp's retirement benefits. The company has a long history in commercial banking, dating back to its founding as the Bank of the Ohio Valley in 1858, and it provides a range of financial services across numerous states. The Fifth Third Bancorp 401(k) plan allows employees to make tax-deferred contributions, which helps them reduce taxable income today, while saving for retirement (Fifth Third Bank) (Fifth Third Bank). For employee pension plans, specific details about the company's pension formula and years of service requirements are managed under the same corporate benefit structure. Employees can participate in a comprehensive benefits program that includes retirement options, which are also part of Fifth Third's efforts to attract and retain top talent (Fifth Third Bank). The eligibility criteria for the 401(k) plan are typically based on employment status and tenure, ensuring that employees who meet the required years of service are eligible to participate. The MB Financial 401(k) plan encourages contributions to maximize retirement savings, supplemented by potential employer matching contributions, enhancing long-term financial security

Restructuring and Layoffs: In 2023, Fifth Third Bancorp announced a restructuring plan aimed at optimizing its operations and reducing costs. The bank planned to cut approximately 5% of its workforce as part of this initiative. This decision reflects broader industry trends where financial institutions are streamlining operations in response to changing market conditions. Company Benefits and Pension Changes: Alongside layoffs, Fifth Third Bancorp also revised its benefits structure, including changes to its pension plan and 401(k) matching contributions. The adjustments are aimed at improving financial stability but may impact employee retirement planning. Given the current economic uncertainties and fluctuating investment environments, it is crucial to stay informed about such changes. Understanding these developments helps employees and investors anticipate and adapt to potential impacts on financial security and retirement planning.

Fifth Third Bancorp offers stock options and RSUs as part of their employee compensation. Stock options and RSUs are typically granted to executives and senior management, providing incentives aligned with company performance. For 2022, 2023, and 2024, details on stock options and RSUs are available in the company's annual proxy statements.

Fifth Third Bancorp offers a robust benefits package that includes comprehensive health-related options for its employees. Key benefits include medical, dental, and vision insurance, which are complemented by various voluntary plans such as disability insurance, life insurance, and critical illness insurance (Fifth Third Bank) (Fifth Third Bank). The company also provides access to a Health Savings Account (HSA) for employees enrolled in high-deductible health plans (HDHPs), allowing them to save pre-tax dollars for medical expenses (Fifth Third Bank). This is an important component of their healthcare benefits, aimed at encouraging proactive financial management for healthcare needs.