In this comprehensive retirement guide for Bank of America employees, we cover the most critical factors to take into account when deciding on the proper time to retire from Bank of America.

From tax rates to health care, inflation, interest rates,  and more, this guide is designed to answer your most pressing retirement questions.

While we are not affiliated with Bank of America, The Retirement Group has extensive experience working with Bank of America employees as they move to and through retirement. For more information, we recommend reaching out to your Bank of America benefits department.

People in the United States need to be aware of changes made by both Bank of America and the IRS, especially as they approach their 50s and 60s. Although the world seems to become more volatile and uncertain each day, there are a few key constants can help you keep your retirement plan on track—no matter where you're starting from. Here are some important updates for 2025:

Tax Code Changes 2025

1. Standard deduction. In 2025, the standard deduction increased to $15,000 for single filers and married filing separately, $30,000 for joint filers, and $22,500 for heads of household.
2. Additional deduction. Taxpayers who are over the age of 65 or blind can add an additional $1,600 to their standard deduction. This amount jumps to $2,000 if they are also unmarried or not a surviving spouse.
3. Cash contributions to charity. The special deduction that allowed non-itemizers to deduct up to $300 in cash donations to charity—or $600 for those married filing jointly—has expired.

Note: Remote workers employed by  Bank of America could face double taxation on state taxes. Thanks to the advent of remote work during the COVID-19 pandemic, many employees moved away from core cities. Notably, these movements could have taken them outside the state where they were employed. Some states established temporary relief provisions to avoid double taxation of income, but many of those provisions may have expired. There are only six states that currently have a "special convenience of employer" rule: Connecticut, Delaware, Nebraska, New Jersey, New York, and Pennsylvania. If you work remotely for Bank of America, and if you don't currently reside in those states, consult with your tax advisor to determine if there are other ways to mitigate the potential for double taxation.

Child Tax Credit Updates for 2025

Bank of America employees interested in reducing their tax burdens as much as possible may benefit from the Child Tax Credit. Although it only applies to individuals with children under the age of 18, it can be relevant to those who are approaching retirement if they have minor children—or if their children have children!

Here are the 2025 updates:

1. Maximum credit per qualifying child: $2,000 for children aged five and under; $3,000 for children aged six through 17.
2. Child Tax Credit eligibility. As a parent or guardian, you are eligible for the Child Tax Credit if your adjusted gross income is less than $200,000, or $400,000 if married filing jointly.
3. Partial refundability. If your Child Tax Credit is greater than your tax, you can receive up to $1,600 as a cash refund.

Optimize your retirement contributions

Contributing to Bank of America's 401k plan can cut this year's tax bill significantly. With the right planning, these benefits can be compounded over time. In 2025, the amount you can save increased:

1. 2025 limit. Individuals can contribute $23,500 to their 401k plans in 2025.
2. Catch-up contributions. Employees age 50 and over can contribute an extra $7,500, bringing their total limit to $31,000. For those who turn 60 - 63 years of age during calendar year 2025, their catch up contribution is $11,250, for a combined total of $34,750.
3. A major opportunity. Lowering your taxable income by up to $34,750 means less of your money is immediately taxed. As shown in the table below, this could save you thousands on your current tax bill.

Many investors choose to invest the money they save in taxes for the year. This bonus nest egg then has the opportunity to grow in the market, which can help pay the deferred tax when they make withdrawals from their accounts later in life.

Dealing with Inflation

Inflation—we're all too familiar with it. Inflation degrades purchasing power over time, meaning the same things cost more year after year. While inflation is difficult to deal with as a working adult, managing it becomes harder in retirement.

To maintain the same standard of living in retirement, you need to factor rising costs into your plan. While the Federal Reserve targets 2% inflation each year, the scorching inflation of the early 2020s reminded us that Fed targets are anything but a guarantee.

When nearing retirement, it's important to keep track of the rate of inflation, especially in specific areas like health care. While prices as a whole have risen dramatically, increases in particular categories can outpace inflation, which can lead to unpleasant surprises down the road if you're not prepared. Speak with a qualified financial advisor when constructing your holistic plan to help plan for the impacts of future inflation.

*Source: IRS.gov, Yahoo, Bankrate, Forbes

Strategy 2. Borrowing from your 401k

Should you? If you need money quickly due to a job loss, serious health emergency, or other reason, borrowing from your 401k can be an option.

Banks will make you jump through many hoops for a personal loan and credit cards charge too much interest. If these are your only options for much-needed cash, your 401k balance might start looking like a usable asset.

Unlike an in-service withdrawal, a loan must be paid back. However, they are not taxable (unless you fail to repay them). Additionally, in some cases, as with hardship withdrawals, you may not be  allowed to make a withdrawal unless you have also taken out the maximum loan available to you.

Yet, despite the potential benefits, taking a loan from your 401k may also come with some drawbacks.

1. Borrowing from the future. First and foremost, you may be setting your retirement plan back by some time if you take money from your future and use it today.
2. Lost growth potential. Even though you'll repay the loan, those funds will miss out on potential growth through investments during the repayment period. This can create a gap in your portfolio, especially if the market performs well while your money is out of the account.
3. Repayment issues. If you leave your employer or lose your job, you may be forced to pay the full loan within a short timeframe. If you're unable to, the loan can be treated as an early withdrawal—and be penalized and taxed as such.

Borrowing from your 401k should be considered a last resort. If you're concerned that you may need to take a loan from your 401k to make ends meet, reach out to an advisor at The Retirement Group today.

HSAs

Health Savings Accounts (HSAs) are often celebrated for their utility in managing health care expenses, particularly for those with high-deductible health plans. However, their benefits extend beyond medical cost management. In fact, they may even provide you with a powerful vehicle to save for retirement.

Understanding HSAs

HSAs are tax-advantaged accounts designed for individuals with high-deductible health insurance plans. For 2025, the IRS defines high-deductible plans as those with a minimum deductible of $1,650 for individuals and $3,300 for families. HSAs allow pre-tax contributions, tax-free growth of investments, and tax-free withdrawals for qualified medical expenses—making them a triple-tax-advantaged account.

The annual contribution limits for HSAs in 2025 are $4,300 for individuals and $8,550 for families, with an additional $1,000 allowed for those aged 55 and older. Unlike Flexible Spending Accounts (FSAs), HSA funds do not expire at the end of the year; they accumulate and can be carried over indefinitely.

Comparing HSAs to 401ks Post-Matching

Once an employer's maximum match in a 401k is reached, further contributions yield diminished immediate financial benefits. This is where HSAs can become a strategic complement. While 401ks offer tax-deferred growth and tax-deductible contributions, their withdrawals are taxable. HSAs, in contrast, provide tax-free withdrawals for medical expenses, which are a significant portion of retirement costs.

HSA as a Retirement Tool

Post age 65, the HSA flexes its muscles as a robust retirement tool. Funds can be withdrawn for any purpose, subject only to regular income tax if used for non-medical expenses. This flexibility is similar to that of traditional retirement accounts, but with the added advantage of tax-free withdrawals for medical costs—a significant benefit given the odds of facing rising health care expenses in retirement.

Furthermore, HSAs do not have Required Minimum Distributions (RMDs), unlike 401ks and Traditional IRAs, offering more control over tax planning in retirement. This makes HSAs particularly advantageous for those who might not need to tap into their savings immediately at retirement or who want to reduce their taxable income.

Investment Strategy for HSAs

Initially, it's prudent to invest conservatively within an HSA, maintaining sufficient liquid funds to cover near-term deductible and other out-of-pocket medical expenses. However, once a financial cushion is established, treating the HSA like a retirement account by investing in a diversified mix of stocks and bonds can enhance the account's growth potential over the long term.

Using HSAs in Retirement

In retirement, HSAs can cover a range of expenses:

• Health Care Costs-Pre Medicare: HSAs can pay for healthcare costs to bridge you to Medicare
• Health Care Costs-Post Medicare: HSAs can pay for Medicare premiums and out-of-pocket medical costs, including dental and vision, which are often not covered by Medicare.
• Long-term Care: Funds can be used for qualified long-term care services and insurance premiums.
• Non-medical Expenses: After age 65, HSA funds can be used for non-medical expenses without incurring penalties, although these withdrawals are subject to income tax.

Bottom Line

HSAs offer unique advantages that can make them a superior option for retirement savings, particularly after the benefits of 401k matching are maximized. Their flexibility in fund use, coupled with tax advantages, can make HSAs a key component of a comprehensive retirement strategy. By strategically managing contributions and withdrawals, individuals can optomize both their financial health and medical well-being.

Company Benefits Annual Enrollment

Annual enrollment for your company's benefits usually occurs each fall.

Before it begins, you will be mailed enrollment materials and an upfront confirmation statement reflecting your benefit coverage to the address on file. You’ll find enrollment instructions and information about your benefit options from Bank of America and contribution amounts. You will have the option to keep the benefit coverage shown on your upfront confirmation statement or select benefit options offered by Bank of America that better support your needs. You may be able to choose to enroll in eBenefits and receive this information via email instead.

Next Steps:

• Watch for your annual enrollment information in the September/November time frame.
• Review your benefits information and use the tools and resources available on your company's Benefits Center website.
• Enroll in eBenefits.
  
  

Short-Term & Long-Term Disability

Short-Term: Depending on your plan, you may have access to short-term disability (STD) benefits through your company.

Long-Term: Your plan's long-term disability (LTD) benefits are designed to provide you with income if you are absent from Bank of America for six consecutive months or longer due to an eligible illness or injury.

If you pass away before collecting your retirement benefits, your surviving loved ones must be prepared to take action. It will be their responsibility to collect their survivor benefits. By following the tips in these three sections, you can prepare your loved ones to make the most of the benefits that they're entitled to: