In order to help our clients from PG&E understand just how NUA can be used, we'd first like to make sure our PG&E clients understand qualified accounts that this tax trick can be used in and how they differ in tax treatment compared to non-qualified accounts. Qualified accounts (i.e. Traditional 401(k)) are designed to offer individuals added tax benefits. In a qualified account, you can make contributions with pre-tax dollars from your income, which lowers your tax bill for that year.

In addition, no tax is paid on appreciation until withdrawals are made. At the point withdrawals are made (tax penalty for withdrawals before 59½ and required minimum distributions [RMDs] after 70) both appreciation and invested amounts are taxed as ordinary income.

On the other hand, we'd like to point out to our PG&E clients that non-qualified plans are those (i.e. a standard brokerage
account) that are not eligible for tax-deferral benefits. Investments are paid
for with after-tax dollars. When appreciated shares are liquidated (a gain is
“realized”), the difference between cost basis (original cost at purchase) and sales price is taxed at either short-term or long-term capital gains rate depending on how long they were held, in addition to taxes paid on dividends the year they are received. Funds from non-qualified accounts are neither subject to early withdrawal penalties nor RMDs.

As you plan your financial future, understanding the full scope of PG&E's retirement benefits gives you the strongest foundation. According to publicly available information, PG&E maintains an active defined benefit pension plan, which provides retirement income based on factors such as years of service and compensation history. PG&E also offers retiree healthcare benefits to eligible employees, which can provide meaningful coverage for those who retire before reaching Medicare eligibility at age 65. Integrating all of your PG&E benefits into one cohesive retirement plan ensures nothing is overlooked and gives you confidence in the path ahead.