Should you make a Roth IRA Conversion for D.R. Horton Employees
Healthcare Provider Update: Healthcare Provider for D.R. Horton
D.R. Horton, being a major homebuilding company, typically provides health insurance through large insurers like UnitedHealthcare and Cigna. These providers offer a range of plans to support D.R. Horton employees and their families, including options for both individual and family coverage.
Potential Healthcare Cost Increases in 2026
As we look ahead to 2026, healthcare consumers can expect significant premium increases, particularly driven by the looming expiration of enhanced federal subsidies under the Affordable Care Act. Reports indicate that some individuals may face premium hikes of up to 75%, severely impacting access to affordable healthcare. Coupled with rising medical costs-amplified by inflation and increased demand for services-these changes could place a substantial financial burden on employees and their families. The combination of these factors suggests that proactive planning in 2025 will be essential for managing the coming year's healthcare expenses.
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If you have qualified funds in your D.R. Horton retirement portfolio and are concerned about future tax law changes, converting those eligible funds to a Roth IRA could be a good solution for any D.R. Horton employee or retiree.
Traditional IRAs are usually funded with before-tax dollars and are generally fully taxable when withdrawn. The owner of a traditional IRA generally has required minimum distributions (RMDs) beginning at age 72. If withdrawals are taken before age 59 1/2, they may be subject to an additional 10% federal tax.
Roth IRAs are funded with after-tax dollars. Distributions after age 59 ½ are completely income-tax-free as long as the Roth IRA owner has met a five-year requirement, determined by the date the owner first funded any Roth IRA. No required minimum distributions apply during the owner’s lifetime, but certain RMD rules do apply to Roth IRA beneficiaries.
The Benefits of a Roth IRA Conversion
A Roth IRA conversion entails taking all or a portion of funds from a traditional retirement account and converting them to a Roth IRA. This could also apply to pre-tax funds in a qualified plan like your D.R. Horton 401(k). Since you are moving pre-tax dollars to a post-tax account, you owe income taxes on the amount converted in the year of conversion. This can be paid with funds outside of your IRA or qualified plan. Any such conversion should be done with due diligence and consult with a financial planner to avoid major tax implications.
A few of the advantages of this strategy include:
Tax-free growth inside of Roth IRAs.
Qualified distributions from Roth IRAs are income-tax free, providing flexibility to choose when to take these distributions for smarter tax management.
There are no RMDs for Roth IRA owners when you reach age 72, but certain rules apply to Roth IRA beneficiaries.
There is a potential for lower taxes if the income tax bracket is projected to be the same or higher at the time of distribution than at the time of conversion.
A Roth IRA conversion could lower your income-tax bracket
Can reduce your estate taxes and eliminate the income tax your heir would have to pay
Some other items for consideration:
Roth IRA conversions are subject to ordinary income tax on the entire amount of the conversion in the year of conversion.
Distributions may be subject to the additional 10% federal tax if removed within five years of the conversion.
If you have any questions about your D.R. Horton 401(k) plan, you can reach out to your D.R. Horton HR Department.
Jim and Linda are both 66 and retired from working at D.R. Horton. They have a pension and Social Security benefits that amount to a taxable income of $65,000 a year. In 2022, they are in the 12% tax bracket ($20,551-$83,550) and are concerned that future tax law changes could put them in a higher bracket. [6]
Jim and Linda also have a traditional IRA with an account value of $750,000. In a few years, they will be required to start taking Required Minimum Distributions from this account that could bump them up to the next tax bracket.
While a Roth conversion is a fairly simple concept, there are many things to consider and several ways to do it. After discussing all of the variables with their financial professional, Jim and Linda decide to use a method often called “tax-bracket stuffing.”
With a taxable income of $65,000, there is $18,550 until they hit the top of the bracket - $83,550. If Jim and Linda convert $40,000 from the traditional IRA to a Roth IRA, they are bumped in to the 22% bracket, but once the standard deduction of $25,100 is applied, their taxable income will be $79,900.
By converting some of the funds from their traditional IRA to a Roth IRA, they can choose the amount of the distribution, so it stays within their lower tax bracket of 12% once the standard deduction is applied. And since qualified distributions from Roth IRAs are income tax free, Jim and Linda have the flexibility to choose when to take these distributions for smarter tax management.
If this method is used each year until Jim and Linda turn 72, they will continue to reduce the amount in their traditional IRA and increase the amount in their Roth IRA.
Want to learn if a solution like this is right for you? Call us today to discuss your financial goals.
What is Your Next Step?
Your receipt of this report entitles you to a one on one conversation with one of our TRG financial advisors to explore the benefits of diversifying your assets with your taxes in mind. Any customary hourly planning fees associated will be waived for this one hour session.
What should you expect at this meeting? Below are some frequently asked questions about what you can expect from our one on one meetings
Q: What will be discussed in this meeting?
A: This meeting is simply an opportunity for you to ask any questions that you may have related to the diversification of your assets with taxes in mind, as well as your personal finance and retirement. Throughout the course of the meeting, we will ask questions about you and your situation.
From working with many D.R. Horton employees and retirees, we’ve found that everyone’s definition of a comfortable retirement from D.R. Horton is a little different and that everyone’s situation is unique. Our goal is to learn about your personal goals as we explore how to help you retire from D.R. Horton the way you want.
Q: Why is the consultation free?
A: Simple. It gives us an opportunity to meet people from around the area that may have questions about financial matters. It’s no secret that we love new clients. Gaining new clients is the way that our business grows. However, we want to provide a comfortable environment for exploring a new, potential professional relationship — for you and for us. By offering this time, it provides a non-threatening way for us to spend some time with you to see if it makes sense for us to continue discussions regarding your D.R. Horton retirement in the future.
Q: Will there be a presentation?
A: Not at all. In fact, we are very hesitant to talk about any potential solutions to any questions or concerns you may have. It is important for us to understand your goals and desires about what retiring from D.R. Horton or investing for your future means to you. We feel it would be financial malpractice to begin exploring solutions prematurely.
We tend to look at the first meeting as an opportunity for you to ask some questions and for us to get to know each other. Furthermore, we can both be more informed by the end of the meeting which will help determine whether or not it will be beneficial for us to meet again.
Q: How long is the meeting?
A: Most of our meetings are stacked throughout the day. Future sessions may require more time, but we’ve found that an hour, provides a good basis for getting to know a little more about each other.
Q: Is there anything I should bring to the meeting?
A: We are sensitive to the fact that your personal financial information is just that — very personal. However, it is hard for us to help if we don’t have at least a fundamental understanding of your financial position. We ask that you bring information regarding your financial accounts and your previous year’s tax return. However, we follow a strict policy of not looking at any of this until you are comfortable with us doing so.
Q: When would we meet again?
A: If we both decide that it would be beneficial to meet again, we’ll schedule another time to get together. At that meeting, we would introduce to you the various areas in which our firm may be able to provide value to your situation. Again, we shy away from offering solutions at this point because we still consider it to be a discovery meeting. At that point, you should be in a better position to make an educated decision as to whether you wish to engage the services of our firm.
Q: Should someone come with me?
A: We do ask that if you are married you bring your spouse with you. If you wish to bring any children with you to the meeting, you are welcome to do so. For that matter, anyone that you may utilize in helping you with your D.R. Horton retirement and personal finances is welcome to join.
About The Retirement Group
The Retirement Group is a nation-wide group of financial advisors who work together as a team.
We focus entirely on retirement planning and the design of retirement portfolios for transitioning corporate employees. Each representative of the group has been hand selected by The Retirement Group in select cities of the United States. Each advisor was selected based on their pension expertise, experience in financial planning, and portfolio construction knowledge.
TRG takes a teamwork approach in providing the best possible solutions for our clients’ concerns. The Team has a conservative investment philosophy and diversifies client portfolios with laddered bonds, CDs, mutual funds, ETFs, Annuities, Stocks and other investments to help achieve their goals. The team addresses Retirement, Pension, Tax, Asset Allocation, Estate, and Elder Care issues. This document utilizes various research tools and techniques. A variety of assumptions and judgmental elements are inevitably inherent in any attempt to estimate future results and, consequently, such results should be viewed as tentative estimations. Changes in the law, investment climate, interest rates, and personal circumstances will have profound effects on both the accuracy of our estimations and the suitability of our recommendations. The need for ongoing sensitivity to change and for constant re-examination and alteration of the plan is thus apparent.
Therefore, we encourage you to have your plan updated a few months before your potential retirement date as well as an annual review. It should be emphasized that neither The Retirement Group, LLC nor any of its employees can engage in the practice of law or accounting and that nothing in this document should be taken as an effort to do so. We look forward to working with tax and/or legal professionals you may select to discuss the relevant ramifications of our recommendations.
Throughout your retirement years we will continue to update you on issues affecting your retirement through our complimentary and proprietary newsletters, workshops and regular updates. You may always reach us at (800) 900-5867.
What type of retirement plan does D.R. Horton offer to its employees?
D.R. Horton offers a 401(k) retirement savings plan to its employees.
Is there a company match for contributions made to the D.R. Horton 401(k) plan?
Yes, D.R. Horton provides a company match for employee contributions to the 401(k) plan, subject to certain limits.
How can employees enroll in the D.R. Horton 401(k) plan?
Employees can enroll in the D.R. Horton 401(k) plan through the company’s benefits portal or by contacting the HR department for assistance.
What is the eligibility requirement for D.R. Horton employees to participate in the 401(k) plan?
Generally, D.R. Horton employees are eligible to participate in the 401(k) plan after completing a specified period of service, as outlined in the plan documents.
Can D.R. Horton employees take loans against their 401(k) savings?
Yes, D.R. Horton allows employees to take loans against their 401(k) savings, subject to the plan's terms and conditions.
What investment options are available in the D.R. Horton 401(k) plan?
The D.R. Horton 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and other investment vehicles.
How often can D.R. Horton employees change their 401(k) contribution amounts?
D.R. Horton employees can change their 401(k) contribution amounts at designated times throughout the year, as specified in the plan rules.
What is the vesting schedule for D.R. Horton’s company match in the 401(k) plan?
The vesting schedule for D.R. Horton’s company match typically follows a graded vesting schedule, which means employees earn ownership of the match over time.
Are there any fees associated with managing the D.R. Horton 401(k) plan?
Yes, there may be fees associated with managing the D.R. Horton 401(k) plan, which are disclosed in the plan documents and annual statements.
How can D.R. Horton employees access their 401(k) account information?
D.R. Horton employees can access their 401(k) account information online through the plan’s designated website or by contacting the plan administrator.
With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
D.R. Horton offers its employees both a defined contribution pension plan and a 401(k) plan, known as the D.R. HORTON, INC. PROFIT SHARING PLUS PLAN. The 401(k) plan is managed through Empower and is available to 9,393 employees as of the latest data. This plan allows participants to contribute a portion of their salary towards their retirement savings, with D.R. Horton offering a matching contribution. Typically, the company matches 50% of employee contributions up to a certain percentage of their salary.
The defined contribution pension plan provided by D.R. Horton also plays a key role in helping employees build a secure financial future. While specific details on eligibility requirements like years of service and age qualification are not publicly available, the defined contribution nature of the plan suggests that the benefits are likely based on the total contributions made by both the employee and the employer over time.
Pension Liability Concerns: D.R. Horton has seen fluctuations in its pension liabilities over the past few years. The company’s pension liabilities in 2023 were reportedly stable, though previous years have shown variability. Monitoring these liabilities is essential in understanding the company’s long-term financial commitments. Importance: It's crucial to address this news given the potential impact of economic shifts and tax regulations on the housing market and employee benefits, which can directly influence D.R. Horton's financial stability.
Stock Options (SOs): Employees of D.R. Horton may be granted stock options that allow them to purchase company stock at a predetermined price after a certain vesting period. This price is usually set at the market value of the stock on the grant date.
Restricted Stock Units (RSUs): RSUs are another form of equity compensation offered by D.R. Horton, where employees are granted units that convert into shares of company stock once certain conditions, such as time-based vesting, are met.
Eligibility and Availability:
D.R. Horton's stock options and RSUs are typically made available to key employees and executives, though the exact eligibility criteria may vary depending on the employee's role, performance, and tenure with the company. These equity incentives are part of D.R. Horton’s broader strategy to retain top talent and incentivize performance.
For example, D.R. Horton’s recent filings indicate continued use of these compensation tools through 2022, 2023, and 2024, with ongoing reviews and updates to their stock option and RSU plans to remain competitive in the market. These incentives are detailed in the company's SEC filings and earnings reports, which are publicly available for shareholders and interested parties to review
D.R. Horton offers a comprehensive health benefits package to its employees, focusing on both short-term and long-term well-being. The company's healthcare offerings include standard health insurance plans, dental and vision coverage, flexible spending accounts (FSAs), and health savings accounts (HSAs) paired with high-deductible health plans (HDHPs). These plans provide employees with a wide range of coverage options, from basic preventative care to more comprehensive services.
For more information you can reach the plan administrator for D.R. Horton at 1341 Horton Cir Arlington, TX 76011; or by calling them at (817) 390-8200.
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