Healthcare Provider Update: Healthcare Provider for LGI Homes LGI Homes primarily partners with The Retirement Group, a division of Wealth Enhancement, to facilitate employee benefits and provide assistance related to healthcare coverage. Potential Healthcare Cost Increases in 2026 As LGI Homes prepares for 2026, employees should brace for significant increases in healthcare costs. With reports indicating that ACA marketplace premiums could rise dramatically-some states experiencing hikes over 60%-many employees may face higher out-of-pocket expenses. Additionally, employers, responding to mounting healthcare cost pressures, are likely to shift more expenses onto workers through increased deductibles and coinsurance rates. By familiarizing themselves with changing benefit structures and optimizing their health savings accounts, LGI Homes employees can mitigate the financial impact of these projected cost increases. Click here to learn more
In
a recent update
by the Internal Revenue Service, a new provision has been implemented allowing LGI Homes employees to withdraw up to $1,000 from their retirement accounts without incurring penalties. This change is part of the enhancements introduced by the 2022 retirement law that took effect this year, designed to facilitate access to funds for personal or family emergency expenses, ranging from medical and funeral care to automobile repairs.
The primary benefit of this $1,000 withdrawal option for LGI Homes employees is its flexibility; individuals are not required to specify the nature of the emergency, which speeds up access to funds. This differs from previous conditions where withdrawals often required detailed justifications and were subject to stricter regulations.
Traditionally, early withdrawals from retirement accounts were accompanied by a 10% penalty and applicable income taxes, except for certain allowances, such as the $5,000 allowed for adoption-related expenses. LGI Homes employees should note that the new emergency measure follows this framework, although the withdrawn amount is subject to income taxes if not repaid.
Primarily aimed at Americans with low to moderate income levels, this measure offers a quicker and less costly solution than other financial means such as credit cards or personal loans for accessing emergency funds.
Initial reactions suggest there might be an increase in replacement contributions, as employees appreciate the flexibility of accessing funds during financial emergencies. This notion is supported by recent trends showing an increase in emergency withdrawal operations, driven by inflationary pressures and credit debts against a backdrop of a rising stock market.
However, LGI Homes employees are not obligated to adopt this new $1,000 emergency option in their 401(k) plans, and its implementation varies. There are limitations to prevent excessive withdrawals that could compromise the account balance—specifically, withdrawals cannot reduce the account amount below $1,000. Additionally, individuals are limited to one such withdrawal per year and have a three-year period to replenish the funds, with subsequent withdrawals conditioned on repayment or sufficient new contributions.
There are no IRS penalties for failing to restore the withdrawn money, but it is crucial for LGI Homes employees to consider the long-term consequences on retirement savings.
Tax implications remain a critical consideration; amounts withdrawn from pre-tax accounts will incur income taxes.
Featured Video
Articles you may find interesting:
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
- Corporate Employees: 8 Factors When Choosing a Mutual Fund
- Use of Escrow Accounts: Divorce
- Medicare Open Enrollment for Corporate Employees: Cost Changes in 2024!
- Stages of Retirement for Corporate Employees
- 7 Things to Consider Before Leaving Your Company
- How Are Workers Impacted by Inflation & Rising Interest Rates?
- Lump-Sum vs Annuity and Rising Interest Rates
- Internal Revenue Code Section 409A (Governing Nonqualified Deferred Compensation Plans)
- Corporate Employees: Do NOT Believe These 6 Retirement Myths!
- 401K, Social Security, Pension – How to Maximize Your Options
- Have You Looked at Your 401(k) Plan Recently?
- 11 Questions You Should Ask Yourself When Planning for Retirement
- Worst Month of Layoffs In Over a Year!
In summary, although the new $1,000 emergency withdrawal option offers a flexible and immediate financial resource for qualified expenses, it entails consequences for tax liability and the health of retirement savings. LGI Homes employees considering this option should carefully weigh these factors, ideally in collaboration with financial advisors, to make informed decisions that align with their long-term financial goals.
The recent update to withdrawal options also includes changes to the RMD (Required Minimum Distribution) rules, which have been adjusted as part of the SECURE Act 2.0, starting in January 2023. The age limit for beginning RMDs has been raised from 72 to 73, providing LGI Homes retirees with more time to grow their investments before mandatory distributions, potentially enhancing their financial flexibility in the future. This adjustment is crucial for retirees managing their long-term assets, as delaying RMDs can also impact their tax level and overall tax liability
('Investopedia', January 2023)
.
Consider your retirement account as a well-stocked pantry in your home. Previously, this pantry was equipped with a sophisticated security system, accessible only at specific times or in emergencies with complex codes and keys. However, recent changes to the withdrawal law have introduced a new, easier key. Now, if you ever need an essential item—like funds for unexpected medical bills or urgent car repairs—you can access up to $1,000 without the usual penalties, just as if you were retrieving a first aid kit from an unopened cabinet. This change allows for quicker, penalty-free access, ensuring the ability to handle emergencies without dissolving your long-term provisions. LGI Homes employees should take note of this update to better manage their retirement savings and handle financial emergencies efficiently.
What is the 401(k) plan offered by LGI Homes?
The 401(k) plan at LGI Homes is a retirement savings plan that allows employees to save a portion of their paycheck before taxes are taken out.
How does LGI Homes match employee contributions to the 401(k) plan?
LGI Homes offers a company match on employee contributions, which helps to enhance your retirement savings.
When can I enroll in the 401(k) plan at LGI Homes?
Employees at LGI Homes can enroll in the 401(k) plan during their initial onboarding process or during the annual open enrollment period.
What is the vesting schedule for LGI Homes' 401(k) match?
The vesting schedule for LGI Homes' 401(k) match typically requires employees to work for a certain number of years before they fully own the matched funds.
Can I change my contribution amount to the LGI Homes 401(k) plan?
Yes, employees can change their contribution amount to the LGI Homes 401(k) plan at any time, subject to plan rules.
What investment options are available in the LGI Homes 401(k) plan?
The LGI Homes 401(k) plan offers a variety of investment options, including mutual funds, stocks, and bonds, allowing employees to choose based on their risk tolerance.
Is there a loan option available through the LGI Homes 401(k) plan?
Yes, LGI Homes allows employees to take loans against their 401(k) balance under certain conditions.
How can I access my LGI Homes 401(k) account information?
Employees can access their LGI Homes 401(k) account information online through the plan’s designated website or mobile app.
What happens to my LGI Homes 401(k) if I leave the company?
If you leave LGI Homes, you have several options for your 401(k), including rolling it over to another retirement account, cashing it out, or leaving it with LGI Homes.
Does LGI Homes offer financial planning resources for 401(k) participants?
Yes, LGI Homes provides access to financial planning resources and tools to help employees make informed decisions about their 401(k) investments.