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

Essential RMD Insights for Lincoln National Retirees: Navigate Your Retirement Withdrawals with Confidence

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

Lincoln National employees navigating Required Minimum Distributions should strategically consider the timing and method of their withdrawals to optimize tax efficiency and income sustainability throughout retirement,' advises Tyson Mavar from The Retirement Group, a division of Wealth Enhancement Group.

Wesley Boudreaux of The Retirement Group, a division of Wealth Enhancement Group, emphasizes the importance for Lincoln National retirees to understand the flexibility and strategic options RMDs offer, advocating for early consultation to enhance retirement outcomes through tailored planning and execution.

In this article, we will discuss:

1. Overview of Required Minimum Distributions (RMDs): Exploring the mandatory withdrawal rules for Lincoln National retirees and the upcoming age changes.

2. Strategies for Managing RMDs: Options such as delaying the first RMD and techniques for reducing the taxable impact through various planning methods.

3. Common Misconceptions and Advanced Techniques: Addressing misconceptions about RMDs and detailing advanced techniques like QCDs and QLACs to optimize financial outcomes.

Required Minimum Distributions (RMDs) are a crucial element of retirement planning for Lincoln National retirees with tax-deferred accounts. Understanding the rules and strategies for managing RMDs can significantly influence your future planning and tax minimization efforts.

Overview of Mandatory Minimum Distributions

For Lincoln National retirees, RMDs are mandatory withdrawals from retirement accounts that must start at a certain age. Currently, RMDs begin at age 73, but changes are set to increase this to age 75 by 2033. This is particularly beneficial for those born in 1960 or later, allowing more growth time for retirement savings before withdrawals become mandatory.

Adaptability in Receiving First RMDs

The timing of your first RMD offers some flexibility. For Lincoln National retirees turning 73 in 2024, the first RMD can be deferred until April 1, 2025. However, this delay requires taking two distributions in the same year—increasing the potential tax impact for that year.

Delaying Seniors' RMDs Who Are Employed

Lincoln National employees who are still working can delay taking RMDs from certain employer retirement plans like a 401(k), provided they don’t own more than 5% of the company. It’s beneficial to consider transferring IRA assets into a 401(k) plan to take advantage of this postponement option.

Receiving Reimbursements in Kind

Another lesser-known option is receiving RMDs in kind rather than cash withdrawals. This method can be advantageous in a down market, allowing Lincoln National retirees to maintain market exposure and potentially favorable tax treatments by transferring securities directly out of retirement accounts.

Misconceptions about RMDs

It's a misconception that RMDs dictate the withdrawal pace of retirement funds. RMDs simply set the minimum withdrawal amount from tax-deferred accounts annually. Surplus withdrawals can be reinvested in taxable accounts or other investments.

Furthermore, it's incorrect to assume RMDs must be taken from each account. IRS rules require the correct total amount to be withdrawn, but strategic planning can determine from which accounts to withdraw based on investment performance and tax implications.

Techniques for Lowering RMDs

RMD impacts can be mitigated through strategies like directing them to a charity via qualified charitable distributions (QCDs), which can reduce taxable income. Additionally, purchasing a Qualified Longevity Annuity Contract (QLAC) within an IRA can defer and reduce RMD amounts, securing income for later retirement years and addressing longevity concerns.

In summary

For Lincoln National retirees, a deep understanding of RMDs is essential for effective retirement planning. Employing strategies such as delaying initial RMDs, accepting in-kind distributions, and utilizing QCDs or QLACs can provide significant tax advantages and align retirement withdrawals with personal financial goals. Consulting with a financial advisor or tax professional is recommended to tailor these strategies to individual needs.

The influence of RMDs on Medicare premiums, particularly through the Income-Related Monthly Adjustment Amount (IRMAA), is another critical consideration. Managing overall income with an RMD strategy can help mitigate potential increases in Medicare Part B and Part D premiums, highlighting the importance of comprehensive financial planning for retirement outcomes.

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Articles you may find interesting:

Sources:

1. Required Minimum Distributions (RMD) Rules: Key Things Every Retiree Should Know.' Birch Street Financial Advisors , www.birchstreetadvisors.com . Accessed 3 Feb. 2025.

2. Kasper, Bud, CFP®, AIF®. 'RMD Strategies for Before & After Retirement.' Modern Wealth Management , www.modwm.com . Accessed 3 Feb. 2025.

3. 'Navigating Required Minimum Distributions: Key Rules, Changes and Challenges.' Stadia Financial , www.stadiafinancial.com . Accessed 3 Feb. 2025.

4. Armstrong, Reginald A.T. 'Making the Most of Required Minimum Distributions (RMDs) in Your Retirement Strategy.' Armstrong Wealth Management Group , www.armstrongwealth.com . Originally published 14 Oct. 2024. Accessed 3 Feb. 2025.

5. 'RMD Strategies for Before & After Retirement.' Modern Wealth Management , www.modwm.com . Accessed 3 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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