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7 IRA Strategies and Tax Rules FMC Employees May Be Overlooking

“FMC employees who take the time to understand evolving IRA contribution limits, spousal opportunities, and conversion rules are often better positioned to coordinate personal savings with workplace retirement benefits. I encourage individuals to review these strategies within the context of their broader retirement and estate planning goals while consulting a qualified tax advisor for guidance tailored to their specific situation.” – Wesley Boudreaux, a representative of The Retirement Group, a division of Wealth Enhancement.

“FMC employees who carefully evaluate IRA contribution limits, spousal strategies, and conversion considerations can create stronger alignment between their personal savings and employer-sponsored benefits. I encourage individuals to view these IRA decisions as part of a coordinated retirement and estate planning framework while consulting a qualified tax professional for guidance specific to their circumstances.” – Patrick Ray, a representative of The Retirement Group, a division of Wealth Enhancement.

In this article, we will discuss:

Key IRA contribution rules and annual limits for 2026.
Strategic considerations such as spousal IRAs, SEP IRAs, and Roth conversions.
Special IRA situations involving alimony, children with earned income, and income phase-outs.

Seven Frequently Ignored Facts About IRAs for FMC Employees

Many FMC employees begin thinking about IRA contributions while completing their tax forms and reviewing potential deductions. Whether you participate in company-sponsored retirement benefits or contribute independently, understanding how IRAs fit into your overall strategy can help you evaluate additional planning opportunities.

You might be unaware of a few things regarding IRAs. These are seven facts that are frequently forgotten.

1. An IRA Can Be Opened and Funded by a Nonworking Spouse

A spouse who does not receive a salary can still save for retirement. If you file a joint federal income tax return and one spouse earns taxable compensation, the nonworking spouse can open and contribute to their own traditional or Roth IRA. ¹

The deductible amount of a traditional IRA contribution may be limited based on income if the working spouse participates in an employer-sponsored retirement plan.

The total annual contribution cap for Roth and traditional IRAs in 2026 is $7,500. A catch-up contribution of $1,100 is permitted for individuals age 50 and older. ¹

Combined IRA contributions for both spouses cannot exceed the taxable income reported on the joint return.

2. You Can Still Contribute Even If You Are Not Eligible for a Deduction

Your traditional IRA contribution may not be deductible if your modified adjusted gross income exceeds certain thresholds and you participate in a company retirement plan such as a 401(k) or 403(b). ²

However, nondeductible contributions may still allow earnings to grow on a tax-deferred basis until withdrawal. ²

Assets from a traditional IRA may also be converted to a Roth IRA. ³ Conversions are permitted regardless of income level, although income taxes may apply depending on the amount converted.

3. Alimony May Not Count as Taxable Compensation for IRA Contributions

Under the Tax Cuts and Jobs Act of 2017, alimony payments from divorce or separation agreements signed on or after January 1, 2019 are not deductible to the payer and are not taxable income to the recipient. ⁴

Because IRA contributions must be based on taxable compensation, post-2018 alimony typically does not qualify.

Agreements signed before January 1, 2019 are generally grandfathered under prior rules unless formally modified.

4. Self-Employed? Consider a SEP IRA

If you have consulting income, freelance work, or a side business, you may be eligible to establish a Simplified Employee Pension (SEP) IRA.

SEP IRA contributions are generally made by the employer and may qualify as business deductions. Contribution limits are substantially higher than traditional or Roth IRAs.

Self-employed individuals may contribute up to 25% of qualified compensation, subject to IRS calculation guidelines. IRS Publication 560 includes worksheets for determining limits.

To make contributions for a given tax year, a SEP IRA typically must be established by the tax filing deadline, including extensions.

5. Catch-Up Contributions for Individuals Over Age 50

Individuals age 50 or older may make additional catch-up contributions to a traditional or Roth IRA.

The catch-up amount for 2026 is $1,100, with future adjustments indexed for inflation.

6. A Child Can Contribute to a Roth IRA if They Have Earned Income

A minor with taxable earned income may contribute to a Roth IRA up to the annual limit or the amount of earned income for the year, whichever is less.

Qualified retirement accounts such as IRAs are generally not counted as assets for purposes of determining the Student Aid Index (SAI) on the Free Application for Federal Student Aid (FAFSA), although withdrawals may affect income calculations. ⁵

7. You May Still Access Roth IRA Benefits Even if You Exceed Income Limits

A Roth IRA offers potential advantages such as tax-free qualified withdrawals and no required minimum distributions for the original account holder.

Although income limits restrict direct Roth IRA contributions, individuals may convert assets from a traditional IRA to a Roth IRA regardless of income.

IRS pro-rata rules require that all traditional, SEP, and SIMPLE IRA balances be considered when determining the taxable amount. Accurate tracking of after-tax contributions requires proper reporting, including Form 8606.

Because conversion strategies can involve complex tax considerations, reviewing your personal situation with a qualified tax professional may be helpful.

Support for Your Retirement Planning

For FMC employees evaluating how IRAs coordinate with workplace retirement benefits, understanding contribution limits, conversion rules, and spousal planning opportunities can play an important role in a broader retirement strategy.

The Retirement Group can assist you in evaluating how these IRA rules align with your long-term goals. If you have questions about retirement planning, you can speak with a representative by calling (800) 900-5867 .

Disclosure: Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA.

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Articles you may find interesting:

Sources:

1. 'Retirement topics - IRA contribution limits.' IRS, 3 Mar. 2026. https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits

2. “IRA Contribution Limits for 2025 and 2026.” Fidelity Learn, Fidelity Investments, 26 Jan. 2026, www.fidelity.com/learning-center/smart-money/ira-contribution-limits .

3. Traditional IRA account owners have considerations to make before performing a Roth IRA conversion. These primarily
include income tax consequences on the converted amount in the year of conversion, withdrawal limitations from a
Roth IRA, and income limitations for future contributions to a Roth IRA. In addition, if you are required to take a required
minimum distribution (RMD) in the year you convert, you must do so before converting to a Roth IRA. Investing involves
risk, including possible loss of principal.

4. 'Divorce or separation may have an effect on taxes,' IRS Tax Reform Tax Tip, July 8, 2019. https://www.irs.gov/newsroom/divorce-or-separation-may-have-an-effect-on-taxes

5. 'How 6 Different Assets Can Affect Your FAFSA and Financial Aid Eligibility.' Saving for College, by Jeffrey Trull. Jan. 15, 2026. https://www.savingforcollege.com/article/how-7-different-assets-can-affect-your-financial-aid-eligibility

How does FMC Technologies plan to manage the investment strategy of its pension plan to ensure it remains solvent and able to meet the benefit payments as employees retire? Given the shifting dynamics of the market, what specific measures is FMC Technologies employing to enhance the liquidity of its assets and mitigate risks associated with underfunding in the current economic climate?

Investment Strategy for Solvency and Benefit Payments: FMC Technologies' pension plan aims to ensure all benefit payments are met as they fall due. The investment strategy includes maintaining funds above the Statutory Funding Objective and transitioning towards lower-risk assets such as Liability Driven Investments (LDI), gilts, and cash. This strategy, driven by advice from LCP, seeks to reduce underfunding risks and ensure liquidity(FMC_Technologies_Pensio…).

In what ways does FMC Technologies incorporate environmental, social, and governance (ESG) factors into its investment decision-making for the pension plan? How does the commitment to ESG investing align with the broader goals of FMC Technologies, and what impact does it have on the long-term sustainability and performance of the company's pension investments?

ESG Factors in Investment Decisions: ESG factors, including climate change, are considered by FMC Technologies in investment decisions. The company encourages investment managers to integrate ESG considerations into their analysis of future performance and risks. ESG aligns with the long-term sustainability of the pension plan, though there are limited opportunities to apply ESG in the current target investment strategy of LDI, gilts, and cash(FMC_Technologies_Pensio…).

Can you elaborate on the additional voluntary contribution (AVC) arrangements available through FMC Technologies and how they are designed to support employees in building a more robust retirement income? What choices do employees have within these AVC options, and how can they tailor their investment to suit their individual risk profiles?

Additional Voluntary Contributions (AVC): FMC Technologies provides AVC arrangements designed to offer a range of investment options to help employees build a more robust retirement income. These options allow employees to tailor investments based on their risk-return preferences, ensuring flexibility in achieving personal retirement goals(FMC_Technologies_Pensio…).

As employees of FMC Technologies approach retirement, what processes are in place to evaluate their pension benefits and determine eligibility for various retirement options? What role does the pension plan's advisory team play in assisting employees with financial planning in preparation for retirement?

Pension Benefits Evaluation Process: FMC Technologies uses a structured process to evaluate pension benefits, supported by investment advisers and trustees. This process involves regularly reviewing the funding level and the benefit cash flows to ensure the pension plan is on track to meet employee retirement needs. Advisory teams help employees with financial planning during the transition to retirement(FMC_Technologies_Pensio…).

What steps is FMC Technologies taking to transition its investment strategy towards greater exposure to low-risk instruments while still aiming for satisfactory returns? How does this transition align with the companyâ€™s funding objectives, and what are the anticipated benefits for the employees in the context of their retirement planning?

Transition to Low-Risk Investments: FMC Technologies has transitioned much of its pension assets into LDI, gilts, and cash to de-risk the investment portfolio. This shift aligns with the company's funding objectives to secure pension liabilities and provide stable returns for retirees. The plan is expected to fully transition to these low-risk instruments to support long-term pension solvency(FMC_Technologies_Pensio…).

How does FMC Technologies measure the performance of its investment managers, and what criteria are used to evaluate their effectiveness in managing the pension plan's assets? In the event that an investment manager does not perform according to expectations, what procedures are in place for FMC Technologies to reassess and possibly reallocate those funds?

Investment Manager Performance: FMC Technologies evaluates the performance of its investment managers using various criteria, including their ability to meet long-term pension objectives. If an investment manager underperforms, FMC Technologies, with advice from LCP, reassesses and rebalances the portfolio as needed to ensure pension assets are properly managed(FMC_Technologies_Pensio…).

What communication channels does FMC Technologies recommend employees use if they have questions or need clarification regarding their retirement benefits and the pension plan? How can employees easily access additional resources or support to better understand their retirement options as they transition out of active employment?

Communication Channels for Retirement Benefits: Employees of FMC Technologies can access information and support regarding their pension and retirement benefits through direct communication with trustees and the pension advisory team. FMC Technologies recommends utilizing these resources for clarity on retirement options and to understand the transition out of active employment(FMC_Technologies_Pensio…).

Considering the implications of portfolio diversification, how does FMC Technologies determine the appropriate asset allocation for its pension plan's investment strategy? What considerations are taken into account to ensure that all employeesâ€™ retirement savings are managed in a way that balances risk and growth potential?

Asset Allocation and Portfolio Diversification: FMC Technologies’ pension plan employs a diversified asset allocation strategy, ensuring a balance between growth and risk. The investment strategy considers the need to match liabilities with assets while progressively reducing exposure to high-risk assets like equities and increasing exposure to low-risk instruments like LDI and gilts(FMC_Technologies_Pensio…).

How does FMC Technologies plan to maintain compliance with regulatory requirements regarding its pension plan, particularly concerning employer-related investments? What are the limitations or restrictions imposed by legislation that affect how FMC Technologies can manage its pension fund assets?

Compliance with Regulatory Requirements: FMC Technologies remains compliant with regulations regarding employer-related investments. Restrictions under the Pensions Act 1995 and the Occupational Pension Schemes (Investment) Regulations 2005 prevent significant investments in TechnipFMC or associated companies to avoid conflicts of interest(FMC_Technologies_Pensio…).

As risks associated with market fluctuations continue to evolve, how does FMC Technologies plan to adjust its investment strategy to mitigate these risks? What safeguards are put in place to protect retirement benefits during periods of economic uncertainty, and how will these strategies affect the financial well-being of FMC Technologiesâ€™ retirees?

Adjusting Investment Strategy for Market Risks: FMC Technologies employs a liability-driven approach to manage the pension fund, mitigating market risks associated with economic fluctuations. Regular reviews of the investment strategy, alongside professional advice, allow the company to adjust and protect the pension plan's assets during uncertain market conditions(FMC_Technologies_Pensio…).