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

Are Lincoln National Employees Prepared for Potential Tax Changes Ahead?

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

As the environment changes with the coming end of the Tax Cuts and Jobs Act, Lincoln National 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 Lincoln National 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 the upcoming 2024 elections may have on Lincoln National employees in relation to the Tax Cuts and Jobs Act.
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.

As the 2024 elections draw near, Lincoln National employees need to know that there are certain changes that may happen in the financial system. The Tax Cuts and Jobs Act (TCJA) passed in 2017 and will expire at the end of 2025 is still a debate now. This legislation made a lot of changes to the tax code through increasing the standard deduction, reducing the top tax rate, expanding tax brackets, and restricting the deduction of state and local taxes (SALT) and mortgage interest. It also raised the federal gift and estate tax exemption thresholds.

During the campaign, President Biden has indicated that many of the cuts implemented by the TCJA should not be extended when they expire. On the other hand, former President Trump has proposed to continue some of the provisions of the act, the details of which are still under negotiation. This is because Congress will have a major say in the decisions that will be made.

Lincoln National 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 limits of estate taxes are expected to drop greatly in 2024, thus gifting becomes more important. With the annual gift tax exemption being increased to $18,000, there are now ways to decrease 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 Lincoln National 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 Lincoln National employee, and therefore the advice of a tax or financial expert is crucial as we head into the election season.

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. Review tactical financial planning in light of the impending sunset of the 2017 Tax Cuts and Jobs Act.

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 the 2024 elections may impact healthcare, taxes, and the overall economy.

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: 'What Is the Tax Cuts and Jobs Act (TCJA)?' Investopedia, www.investopedia.com . Accessed 4 Feb. 2025.

2. Thrivent: 'TCJA Set to Expire: Tax Moves to Consider if You're Nearing or in Retirement.' Thrivent, 20 Feb. 2024, www.thrivent.com . Accessed 4 Feb. 2025.

3. Pacific Life Annuities: 'Tax Cuts and Jobs Act Sunset Provisions after 2025.' 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. Waverly Advisors: 'Preparing for the Expiration of the Tax Cuts and Jobs Act (TCJA).' Waverly Advisors, waverly-advisors.com. Accessed 4 Feb. 2025.

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).

Additional Articles

Check Out Articles for Lincoln National employees

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

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