Retirement Guide for Corporate Employees || The Retirement Group

In our comprehensive retirement guide for corporate employees, we go through many factors which you may take into account when deciding on the proper time to retire from your company. Some of those factors include: healthcare & benefit changes, interest rates, current tax rates, inflation, and much more. Keep in mind we are not affiliated with your company. We recommend reaching out to your your company benefits department for further information.

Each year the IRS adjusts tax brackets, deductions and retirement plan limits for inflation. These are the 2027 changes most likely to matter to employees who are approaching retirement:

For 2027, the standard deduction is $16,600 for single filers and married individuals filing separately, $33,200 for married couples filing jointly, and $24,925 for heads of household.
Taxpayers who are 65 or older, or blind, can add $1,700 to their standard deduction for 2027 if married, or $2,100 if single or head of household.
For tax years 2025 through 2028, taxpayers age 65 or older may also claim a separate senior deduction of up to $6,000 each ($12,000 for a married couple filing jointly when both spouses qualify). It phases out above $75,000 of modified adjusted gross income ($150,000 for joint filers) and is available whether or not you itemize.

The personal exemption remains at $0. The One, Big, Beautiful Bill Act made that change permanent.

Retirement account contributions: Pre-tax contributions to your employer's 401(k) plan may help reduce your taxable income. For 2027, employees can contribute up to $25,500 (estimated) to 401(k), 403(b) and most 457 plans. Employees age 50 and over can add a catch-up contribution of up to $8,500 (estimated), and employees age 60 through 63 may be able to make a higher catch-up of up to $11,750 (estimated) if their plan allows it. If your 2026 Social Security wages from the employer sponsoring your plan were above $155,000 (estimated), any 2027 catch-up contributions must be made as Roth (after-tax) contributions. The IRA contribution limit for 2027 is $8,000 (estimated), plus a catch-up amount for those age 50 and over.

Charitable deduction for non-itemizers: Beginning with tax year 2026, taxpayers who take the standard deduction may deduct up to $1,000 ($2,000 joint) of cash gifts to eligible charities. Gifts to donor-advised funds and non-cash gifts do not qualify.

Child Tax Credit: For 2027, the Child Tax Credit is up to $2,300 per qualifying child. The credit begins to phase out above $200,000 ($400,000 joint) of modified adjusted gross income.

Remote work and state taxes: If you work remotely in a different state from your employer's office, you may owe tax in more than one state. Some states, including New York, apply a "convenience of the employer" rule that can tax a remote employee's wages as if the work were done in that state. A tax advisor can help you review whether credits or other options apply to your situation.

2027 Federal Income Tax Brackets

Rate	Single	Married Filing Jointly	Married Filing Separately	Head of Household
10%	$0 - $12,800	$0 - $25,600	$0 - $12,800	$0 - $18,250
12%	$12,801 - $52,025	$25,601 - $104,050	$12,801 - $52,025	$18,251 - $69,650
22%	$52,026 - $109,125	$104,051 - $218,250	$52,026 - $109,125	$69,651 - $109,100
24%	$109,126 - $208,325	$218,251 - $416,650	$109,126 - $208,325	$109,101 - $208,300
32%	$208,326 - $264,550	$416,651 - $529,100	$208,326 - $264,550	$208,301 - $264,550
35%	$264,551 - $661,375	$529,101 - $793,650	$264,551 - $396,825	$264,551 - $661,350
37%	$661,376+	$793,651+	$396,826+	$661,351+

Source: IRS Rev. Proc. 2026-35, section 3.01, Tables 1-4 (IR-2026-133, November 5, 2026).

Inflation reduces purchasing power over time, so the same goods and services cost more as prices rise. Social Security benefits rise 3.6% in January 2027 through the annual cost-of-living adjustment. When building a retirement income plan, consider inflation assumptions, Medicare premiums, prescription drug costs and other health care expenses alongside the 2027 tax brackets and deductions above. For 2027, the standard Medicare Part B premium is $209.50 (estimated) a month and the annual deductible is $292 (estimated). Out-of-pocket spending on covered Part D drugs is capped at $2,400.

Sources: IRS, Social Security Administration, Centers for Medicare & Medicaid Services.

Estimated figures are projections. Retirement plan limits are from Milliman's October 15, 2026 estimate. The Medicare Part B premium and deductible are from the 2026 Medicare Trustees Report, Table V.E2. The IRS and CMS had not announced these 2027 amounts as of November 11, 2026. This section will be updated when they do.

Retirement planning is a verb. And consistent action must be taken whether you’re 20 or 60.

The truth is that most Americans don’t know how much to save or the amount of income they’ll need.

No matter where you stand in the planning process, or your current age, we hope this guide gives you a good overview of the steps to take and resources that help you simplify your transition from your company into retirement and get the most from your benefits.

You know you need to be saving and investing, especially since time is on your side the sooner you start, but you don’t have the time or expertise to know if you’re building retirement savings that can last after leaving your company.

As decades go by, you’re likely full swing into your career at your company and your income probably reflects that. However, the challenges of saving for retirement start coming from large competing expenses: a mortgage, raising children, and saving for their college.

One of the classic planning conflicts is saving for retirement versus saving for college. Most financial planners will tell you that retirement from your company should be your top priority because your child can usually find support from financial aid while you’ll be on your own to fund your retirement.

How much we recommend that you invest towards your retirement is always based on your unique financial situation and goals. However, consider investing a minimum of 10% of your salary toward retirement through your 30s and 40s. So long as your individual circumstances allow, it should be a goal to maximize your company's contribution match.

Over 50? For 2027, you can invest up to $34,000 into your retirement plan/401(k) with your company, including catch-up contributions.

As you enter your 50s and 60s, you’re ideally at peak earning years with some of your major expenses, such as a mortgage or child-rearing, behind you or soon to be in the rearview mirror. This can be a good time to consider whether you have the ability to boost your retirement savings goal to 20% or more of your income. For many people, this could potentially be the last opportunity to stash away funds.

In 2027, workers age 50 or older can invest up to $25,500 into their retirement plan/401(k) and, once they meet this limit, they can add an additional $8,500 in catch-up contributions for a combined total of $34,000 for the

If you’re a corporate employee over 50, you may be eligible to use a catch-up contribution within your IRA.

These retirement savings vehicles give you the chance to take advantage of three main benefits:

Compound growth opportunities (as seen above)
Tax saving opportunities
Matching contributions

Matching contributions are just what they sound like: your company matches your own 401(k) contributions with money that comes from the company. If your company matches, the company money typically matches up to a certain percent of the amount you put in.

Unfortunately, many people might not be taking full advantage of your company's match because they’re not putting in enough themselves.

These retirement savings vehicles give you the chance to take advantage of three main benefits:

Compound growth opportunities (as seen above)
Tax saving opportunities
Matching contributions

Surveys consistently find that many workers see a company 401(k) match as important to reaching their retirement goals.

According to Bank of America's 2023 Financial Life Benefits Impact Report, 56% of eligible employees participated in a 401(k) plan, and 66% of participants contributed less than $5,000 for the year.

The study also found that fewer than 1 in 10 participants’ contributions reached the ceiling on elective deferrals under IRS Section 402(g), $25,500 for 2027.

Employees who don't contribute enough to receive their full company match may leave potential retirement money on the table each year.

- If your company will match up to 3% of your plan contributions and you only contribute 2% of your salary, you aren’t getting the full amount of their potential match.

- By bumping up your contribution by just 1%, your company is now matching 3% (the max) of your contributions for a total contribution of 6% of your salary. You aren't leaving money on the table.

Whether you’re changing jobs or retiring from your company, knowing what to do with your hard-earned retirement savings can be difficult. A company-sponsored plan, such as a pension and 401(k), may make up the majority of your retirement savings, but how much do you really know about that plan and how it works?

There are seemingly endless rules that vary from one retirement plan to the next, early out offers, interest rate impacts, age penalties, and complex tax impacts.

Increasing your investment balance and reducing taxes is the key to a successful retirement plan spending strategy. At The Retirement Group, we can help you understand how your company's 401(k) fits into your overall financial picture and how to make that plan work for you. Workers are far more likely to rely on their workplace defined contribution (DC) retirement plans as a source of income.

Sample Retirement Plan

Each company has a unique plan. These plans are often complex, so it is important to work with an advisor who understands your plan. Regardless of which company you work for, your company plan is complicated and difficult to understand. To better understand your plan, let's look at a few hypothetical examples of how pension formulas can work.

Perhaps your company determines its contribution percentage by looking at specific factors related to each employee, such as a tiered contribution that increases once an employee passes a years-of-service threshold.

On the other hand, it's possible that your company determines its benefit based on a combination of specific factors. For example, some final-average-pay pension formulas multiply final average pay by years of service and a set percentage, then subtract a Social Security offset.
- Some companies use a Social Security offset when calculating pension benefits, and each plan calculates the offset differently, which is why it's important to contact and advisor who knows your specific plan sponsored by your company.

Complex Formula

Your company may use a more complex formula. For example, some final-average-pay plans multiply a percentage of your highest average earnings by your years of service and then subtract a Social Security offset.

Many final-average-pay plans base the benefit on your highest average earnings over a set period, such as 36 consecutive months, so check how your company's plan defines it.

In most cases, this will be the sum of your last 36 months divided by 36.

The applicable interest rates are IRS segment rates for a lookback period that each plan sets, so check how your company's plan defines it. The three segment rates are calculated by the IRS according to regulations that are also part of the Pension Protection Act of 2006 and reflect the yields of short-, mid-, and long-term corporate bonds.

Different Plans

Many large employers have several pension plans, with different formulas for management and non-management employees. Lets look at a sample non-management plan.

Let's take a look at a hypothetical pension example for a gentleman by the name of Joe Smith who is an hourly employee in an hourly pension plan.

In 1990, Joe is hired and participates in his employer's hourly pension plan:

Hourly Pension Plan

Some hourly defined benefit plans use pension bands. A pension band determines your benefits based on your job title/grade level/occupation, and the plan credits a set monthly dollar amount for each year of service.

If a Pension is offered, your company's retirement plan will generally allow for different forms of payment:

Single Life Annuity

The monthly Single Life Annuity is the benefit from which all of the optional forms of payment under the plan are derived.
Pays a fixed amount each month for retiree’s lifetime.
A death benefit may be payable to your beneficiary.
If you are vested and die before your pension payments begin, a pre-retirement survivor benefit may be payable to your spouse; check your their company plan's summary plan description for the details.

Lump-Sum Option (If Your Plan Offers One)

Lump-sum payment is actuarially equivalent to the total annuity you would have received as a Single Life Annuity during your lifetime.
Calculated using actuarial factors based on your age and the interest rate in effect on your annuity starting date.
No death benefits are payable.

NOTE: Lump-Sum vs. Annuity - With decreasing interest rates, your lump-sum payout will increase.

Life & Term-Certain Annuity Option

Smaller than the Single Life Annuity.
5, 10, or 15 year period certain.
If you have multiple beneficiaries or if your beneficiary is your estate or trust, remaining payments converted actuarially to a lump-sum.
No death benefits are payable.

Check out this article by our partner company The Wealth Enhancement Group to learn more about estate planning and trusts:

5 Essential Documents for Crafting a Good Estate Plan

4 Common Types of Spousal Trusts

Looking for a second opinion about your retirement from your company? Click here to speak to financial advisor today or call (800) 200-9838.

Joint & Survivor Annuity

Upon your death, a percentage of your monthly benefit is paid to your joint annuitant for his or her lifetime
Reduction factors may apply depending on your company's policy.

Uniform Income

Receive same level of income before and after receiving Social Security benefits
The level of income may change at a certain age. For example, under a typical uniform income option:

Before age 62, employees receive a larger monthly annuity from the plan
After age 62, when Social Security benefit is available, employees receive a smaller monthly annuity from the plan.
Each company has varying rules in regards to Uniform Income. Review your company's SPD or talk to an advisor to find out the rules for your specific plan.

*These are examples and your company's plan may be different.

Changes in interest rates can significantly affect the value of a pension lump sum.

Keep in mind, annuities typically do not include cost-of-living increases, however some employees prefer the steady monthly benefit. One strategy some employees consider instead of electing the company's lump-sum option is to elect the single life annuity and buy a life insurance policy for their spouse and children, which may help them make the most of their pension benefit.

If you are thinking about what to do with your company-sponsored pension plan, you can discuss with a TRG advisor if you should take the Lump Sum or Annuity. When should you take it? What is best for you and your family?

You should routinely use the tools and resources found on The Retirement Group's E-Book library, such as the Retirekit, to model your pension benefit in retirement and the pension payment options that will be available to you after leaving your company.

You can also contact The Retirement Group at (800)-900-5867. We can connect you with a retirement-focused advisor to help you start the retirement process and understand your payment options.

Note: We recommend you read your company's Summary Plan Description. The Retirement Group is not affiliated with your company, or any affiliate.

Next Step:

Determine if you should take your pension from your company as a lump sum or annuity.
How do interest rates affect your decision?
Use the "Retirekit" to understand cash flow, interest rates, and explore which pension option might be the best fit for you during retirement.
As you get closer to your retirement date, contact a retirement-focused advisor at The Retirement Group and also read your company's SPD Summary to start your retirement process.
Your company will need you to provide documents that show proof of birth, marriage, divorce, Social Security number, etc., for you and your spouse/legally recognized partner.
Your company may have a Beneficiary Designation online to make updates to your beneficiary designations, if applicable to your pension program. Please read your company's SPD for more detail.

Lump-Sum vs. Annuity

Retirees who are eligible for a pension are often offered the choice of whether to actually take the pension payments for life, or receive a lump-sum dollar amount for the “equivalent” value of the pension – with the idea that you could then take the money (rolling it over to an IRA), invest it, and generate your own cash flows by taking systematic withdrawals throughout retirement from your company.

The upside of keeping the pension itself is that the payments are designed to continue for life (at least to the extent that the pension plan itself remains in place and solvent and doesn’t default). Thus, whether you live 10, 20, or 30 (or more!) years after leaving your company, the risk of outliving the money may be reduced.

Annuity-Product-1024x546-removebg-preview-1

In contrast, selecting the lump-sum gives you the potential to invest, earn more growth, and potentially generate even greater retirement cash flow. Additionally, if something happens to you, any unused account balance will be available to a surviving spouse or heirs. However, if you fail to invest the funds for sufficient growth, there’s a danger that the money could run out altogether and you may regret not having held onto the pension’s “income for life” feature.

Ultimately, the “risk” assessment that should be done to determine whether or not you should take the lump sum or the lifetime payments that your company pension offers depends on what kind of return must be generated on that lump-sum to replicate the payments of the annuity. After all, if it would only take a return of 1% to 2% on that lump-sum to create the same pension cash flows for a lifetime, there is little risk that you will outlive the lump-sum after leaving your company, even if you withdraw from it for life(10). However, if the pension payments can only be replaced with a higher and much riskier rate of return, there is, in turn, a greater risk those returns won’t manifest and you could run out of money.

Interest Rates and Life Expectancy

In many defined benefit plans, current and future retirees are offered a lump-sum payout or a monthly pension benefit. Sometimes these plans have billions of dollars worth of unfunded pension liabilities, and in order to get the liability off the books, your company may offer a lump-sum. interest-rate-system-vector-45263039-removebg-preview

Depending on life expectancy, the initial lump-sum is typically less money than regular pension payments over a normal retirement time frame. However, most individuals that opt for the lump-sum plan to invest the majority of the proceeds, as most of the funds aren't needed immediately after retirement from your company.

Something else to keep in mind is that current interest rates, as well as your life expectancy at retirement, have an impact on lump-sum payout options of your company's defined benefit pension plans. Lump-sum payouts are typically higher in a low interest rate environment, but be careful because lump-sums decrease in a rising interest rate environment.

Additionally, projected pension lump-sum benefits for active corporate employees will often decrease as an employee ages and their life expectancy decreases. This can potentially be a detriment of continuing to work, so it is important that you run your pension numbers often and thoroughly understand the impact that timing has on your benefit. Other factors such as income needs, need for survivor benefits, and tax liabilities often dictate the decision to take the lump-sum over the annuity option on the pension.

When is the last time you reviewed your company's 401(k) plan account or made any changes to it?

If it’s been a while, you’re not alone. Surveys have long found that many plan participants spend only a few hours a year reviewing their 401(k) investment choices, and fewer still make account changes.

When you retire from your company, if you have balances in your 401(k) plan, you should receive a distribution notice (some plans call it a Participant Distribution Notice) by mail or electronically. This notice will show the current value that you are eligible to receive from each plan and explain your distribution options. It will also tell you what you need to do to receive your final distribution. Please call The Retirement Group at (800)-900-5867 for more information and we can help you get in front of a specific retirement-focused advisor.

Next Step:

Watch for your Participant Distribution Notice and Special Tax Notice Regarding Plan Payments. These notices will help explain your options and what the federal tax implications may be for your vested account balance.
"What has Worked in Investing" & "8 Tenets when picking a Mutual Fund".
To learn about your distribution options, call The Retirement Group at (800)-900-5867. Click our e-book for more information on "Rollover Strategies for 401(k)s". Use the Online Beneficiary Designation to make updates to your beneficiary designations, if needed.

Note: If you voluntarily terminate your employment from your company, you may not be eligible to receive the annual contribution.

Over half of plan participants admit they don’t have the time, interest or knowledge needed to manage their 401(k) portfolio. But the benefits of getting help goes beyond convenience. Getting help may make it easier to build a diversified portfolio and stick with it through market swings. diversification-removebg-preview

Getting help can be the key to better results across the 401(k) board.

A 2010 Charles Schwab study found several positive outcomes common to those using independent professional advice. They include:

Improved savings rates – 70% of participants who used 401(k) advice increased their contributions.
Increased diversification – Participants who managed their own portfolios invested in an average of just under four asset classes, while participants in advice-based portfolios invested in a minimum of eight asset classes.
Increased likelihood of staying the course – Getting advice increased the chances of participants staying true to their investment objectives, making them less reactive during volatile market conditions and more likely to remain in their original 401(k) investments during a downturn. Don’t try to do it alone.

Get help with your company's 401(k) plan investments. Your nest egg will thank you.

In-Service Withdrawals

Generally speaking, you can withdraw amounts from your account while still employed with your company under the circumstances described below.

It’s important to know that certain withdrawals are subject to regular federal income tax and, if you’re under age 59½, you may also be subject to an additional 10% penalty tax. You can determine if you’re eligible for a withdrawal, and request one, online or by calling your company's Benefits Center.

Rolling Over Your 401(k)

An in-service distribution can generally be rolled over to an IRA, except any part that is a required minimum distribution (RMDs generally begin at age 73, or 75 for people born in 1960 or later). A direct rollover would avoid the 10% early withdrawal penalty as well as the mandatory 20% tax withholding. Your company's plan summary outlines more information and possible restrictions on rollovers and withdrawals.

Because a withdrawal permanently reduces your retirement savings and is subject to tax, you may want to consider taking a loan from the plan instead of a withdrawal to meet your financial needs. Unlike withdrawals, loans must be repaid, and are not taxable (unless you fail to repay them). In some cases, as with hardship withdrawals, you are not allowed to make a withdrawal unless you have also taken out the maximum loan available within the company plan.

You should also know that your company's plan administrator reserves the right to modify the rules regarding withdrawals at any time, and may further restrict or limit the availability of withdrawals for administrative or other reasons. All plan participants will be advised of any such restrictions, and they apply equally to all corporate employees.

Borrowing from your 401(k)

Should you? Maybe you lose your job with your company, have a serious health emergency, or face some other reason that you need a lot of cash. Banks make you jump through too many hoops for a personal loan, credit cards charge too much interest, and … suddenly, you start looking at your 401(k) account and doing some quick calculations about pushing your retirement from your company off a few years to make up for taking some money out.

We understand how you feel: It’s your money, and you need it now. But, take a second to see how this could adversely affect your retirement plans after leaving your company.

Consider these facts when deciding if you should borrow from your 401(k). You could:

Lose growth potential on the money you borrowed.
Deal with repayment and tax issues if you leave your company.
Repayment and tax issues, if you leave your compaany.

Net Unrealized Appreciation (NUA)

When you qualify for a distribution you have three options: Pads with color diagrams and color shining on background-3

Roll-over your qualified plan to an IRA and continue deferring taxes.
Take a distribution and pay ordinary income tax on the full amount.
Take advantage of NUA and reap the benefits of a more favorable tax structure on gains.

How does Net Unrealized Appreciation work?

First an employee must be eligible for a distribution from their qualified company-sponsored plan. Generally at retirement or age 59 1⁄2, the employee takes a 'lump-sum' distribution from the plan, distributing all assets from the plan during a 1 year period. The portion of the plan that is made up of mutual funds and other investments can be rolled into an IRA for further tax deferral. The highly appreciated company stock is then transferred to a non-retirement account.

The tax benefit comes when you transfer the company stock from a tax-deferred account to a taxable account. At this time you apply NUA and you incur an ordinary income tax liability on only the cost basis of your stock. The appreciated value of the stock above its basis is not taxed at the higher ordinary income tax but at the lower long-term capital gains rate, currently 15%. This could mean a potential savings of over 30%.

As a corporate employee, you may be interested in understanding NUA from a financial advisor.

IRA Withdrawal

When you qualify for a distribution you have three options: IRA

Your retirement assets may consist of several retirement accounts: IRAs, 401(k)s, taxable accounts, and others.

So, what is the most efficient way to take your retirement income after leaving your company?

You may want to consider meeting your income needs in retirement by first drawing down taxable accounts rather than tax-deferred accounts.

This may help your retirement assets with your company last longer as they continue to potentially grow tax deferred.

You will also need to plan to take the required minimum distributions (RMDs) from any company-sponsored retirement plans and traditional or rollover IRA accounts.

Under current IRS rules, many account owners must begin taking required minimum distributions from these types of accounts at age 73 (age 75 for those born in 1960 or later). SECURE 2.0 reduced the excise tax for each under-distributed RMD dollar from 50% to 25%, with a further reduction possible when corrected timely.

Your first RMD can be delayed until April 1 of the year after you reach RMD age, and if you are still working (and do not own 5% or more of the company), RMDs from your current employer's plan can generally wait until April 1 of the year after you retire. This still-working exception does not apply to IRAs.

Two flexible distribution options for your IRA

When you need to draw on your IRA for income or take your RMDs, you have a few choices. Regardless of what you choose, IRA distributions are subject to income taxes and may be subject to penalties and other conditions if you’re under 59½.

Partial withdrawals: Withdraw any amount from your IRA at any time. If you’re 73 or over, you’ll have to take at least enough from one or more IRAs to meet your annual RMD.

Systematic withdrawal plans: Structure regular, automatic withdrawals from your IRA by choosing the amount and frequency to meet your income needs after retiring from your company. If you’re under 59½, you may be subject to a 10% early withdrawal penalty (unless your withdrawal plan meets Code Section 72(t) rules).

Your tax advisor can help you understand distribution options, determine RMD requirements, calculate RMDs, and set up a systematic withdrawal plan.

HSAs

Health Savings Accounts (HSAs) are often celebrated for their utility in managing healthcare expenses, particularly for those with high-deductible health plans. However, their benefits extend beyond medical cost management, positioning HSAs as a potentially superior retirement savings vehicle compared to traditional retirement plans like 401(k)s, especially after employer matching contributions are maxed out.

Understanding HSAs

HSAs are tax-advantaged accounts designed for individuals with high-deductible health insurance plans. For 2027, the IRS defines high-deductible plans as those with a minimum deductible of $1,750 for individuals and $3,500 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 2027 are $4,500 for individuals and $9,000 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 401(k)s Post-Matching

Once an employer's maximum match in a 401(k) is reached, further contributions yield diminished immediate financial benefits. This is where HSAs can become a strategic complement. While 401(k)s 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 akin to that of traditional retirement accounts, but with the added advantage of tax-free withdrawals for medical costs - a significant benefit given the rising healthcare expenses in retirement.

Furthermore, HSAs do not have Required Minimum Distributions (RMDs), unlike 401(k)s 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 minimize their taxable income.

Investment Strategy for HSAs

Initially, it's prudent to invest conservatively within an HSA, focusing on 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 help enhance the account's growth potential over the long term.

Utilizing HSAs in Retirement

In retirement, HSAs can cover a range of expenses:

Healthcare Costs-Pre Medicare: HSA's Can pay for healthcare costs to bridge you to medicare
Healthcare 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.

Conclusion

In summary, HSAs offer unique advantages that can make them a superior option for retirement savings, particularly once you are contributing enough to receive the full 401(k) match. Their flexibility in fund usage, coupled with tax advantages, makes HSAs an essential component of a comprehensive retirement strategy. By strategically managing contributions and withdrawals, individuals can work toward stronger financial health in retirement and help preserve both their medical and financial 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 your company 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 your company that better support your needs. You may be able to choose to receive this information electronically instead.

Next Steps:

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

Things to keep in mind :

Many Americans cite health care costs as one of their top financial concerns.
Medical bills are a leading contributor to personal bankruptcy in the United States.
For older Americans, healthcare costs represent the second-largest expense, behind housing.

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 unable to work for an extended period due to an eligible illness or injury, after a waiting period set by your plan.

What Happens If Your Employment with Your Company Ends

Your life insurance coverage and any optional coverage you purchase for your spouse/domestic partner and/or children ends on the date your employment with your company ends, unless your employment ends due to disability. Some group life plans still pay benefits if you die within a short period after your employment ends (often the 31-day conversion period), so check your company's plan for its rules.

Note:

You may have the option to convert your life insurance to an individual policy or elect portability on any optional coverage.
If you stop paying supplementary contributions, your coverage will end.
If you are at least 65 and you pay for supplemental life insurance, you should receive information in the mail from the insurance company that explains your options.
Make sure to update your beneficiaries. Seeyour company's SPD for more details.

Beneficiary Designations
As part of your company's retirement planning and estate planning, it’s important to name someone to receive the proceeds of your benefit programs in the event of your death. That’s how your company will know whom to send your final compensation and benefits. This can include life insurance payouts and any pension or savings balances you may have.

Next Step:

When you retire from your company, make sure that you update your beneficiaries. Your company should have an Online Beneficiary Designation form for life events such as death, marriage, divorce, child birth, adoptions, etc.

If you are unsure about your company's benefits, schedule a call to speak with one of our retirement-focused advisors.

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For many retirees, understanding and claiming Social Security can be difficult but identifying optimal ways to claim Social Security is essential to your retirement income planning. Social Security benefits are not designed to be the sole source of your retirement income, but a part of your overall withdrawal strategy.

Knowing the foundation of Social Security, and using this knowledge to your advantage, can help you make the most of your benefit.

It’s your responsibility to enroll in Medicare parts A and B when you first become eligible - and you must stay enrolled to have coverage for Medicare-eligible expenses. This applies to your Medicare eligible dependents as well.

You should know how your retiree medical plan choices or Medicare eligibility impacts your plan options. Before you retire from your company, contact the U.S. Social Security Administration directly at 800-772-1213, call your local Social Security Office or visit ssa.gov.

They can help determine your eligibility, get you and/or your eligible dependents enrolled in Medicare or provide you with other government program information. For more in-depth information on Social Security, please call us.

Check the status of your Social Security benefits before you retire from your company. Contact the U.S. Social Security Administration, your local Social Security office, or visit ssa.gov.

Are you eligible for Medicare or will be soon?

If you or your dependents are eligible after you leave your company, Medicare generally becomes the primary coverage for you or any of your dependents as soon as they are eligible for Medicare. This will affect company-provided medical benefits.

You and your Medicare-eligible dependents must enroll in Medicare Parts A and B when you first become eligible. Many company-sponsored retiree medical plans pay benefits as if Medicare Parts A and B paid first, whether or not you actually enroll, so check your company's plan for its rules.

For details on coordination of benefits, refer to your company's summary plan description.

If you or your eligible dependent don’t enroll in Medicare Parts A and B, your provider can bill you for the amounts that are not paid by Medicare or your company-specific medical plan … making your out-of-pocket expenses significantly higher.

According to the Employee Benefit Research Institute (EBRI), Medicare covered about 62% of the cost of health care services for beneficiaries 65 and older in 2023. EBRI's 2026 analysis estimates that a 65-year-old couple with a Medigap plan and median prescription-drug expenses would need $405,000 in savings to have a 90% chance of covering their health care expenses. A single male would need $212,000 and a single female, thanks to her longer life expectancy, would need $252,000.

The ideas of happily ever after and until death do us part don’t come true for every couple, and divorce after age 50 has become more common in recent decades. Most couples saved together for decades, assuming they would retire together. After a divorce, they face the expenses of a pre-or post-retirement life, but with half their savings.

If you’re divorced or in the process of divorcing, your former spouse(s) may have an interest in a portion of your retirement benefits from your company. Before you can start your pension - and for each former spouse who may have an interest - you’ll need to provide your company with the following documentation:

A copy of the court-filed Judgment of Dissolution or Judgment of Divorce along with any Marital Settlement Agreement (MSA)
A copy of the court-filed Qualified Domestic Relations Order (QDRO)

Provide your company with any requested documentation to avoid having your pension benefit delayed or suspended. To find out more information on strategies if divorce is affecting your company's retirement benefits, please give us a call.

You’ll need to submit this documentation to your company’s online pension center regardless of how old the divorce or how short the marriage. *Source: The Retirement Group, “Retirement Plans - Benefits and Savings,” U.S. Department of Labor; “Generating Income That Will Last Throughout Retirement,” Fidelity

Social Security and Divorce

You can apply for a divorced spouse’s benefit if the following criteria are met:

You’re at least 62 years of age.
You were married for at least 10 years prior to the divorce.
You are currently unmarried.
Your ex-spouse is entitled to Social Security benefits.
Your own Social Security benefit amount is less than your spousal benefit amount, which is equal to one-half of what your ex’s full benefit amount would be if claimed at Full Retirement Age (FRA).

Unlike with a married couple, your ex-spouse doesn’t have to have filed for Social Security before you can apply for your divorced spouse’s benefit, but this only applies if you’ve been divorced for at least two years and your ex is at least 62 years of age. If the divorce was less than two years ago, your ex must already be receiving benefits before you can file as a divorced spouse.

In the process of divorcing?

If your divorce isn’t final before your retirement date from your company, you’re still considered married. You have two options:

Retire from your company before your divorce is final and elect a joint pension of at least 50% with your spouse, or get your spouse’s signed, notarized consent to a different election or lump sum.
Delay your retirement from your company until after your divorce is final and you can provide the required divorce documentation.*

Source: The Retirement Group, “Retirement Plans - Benefits and Savings,” U.S. Department of Labor, 2019; “Generating Income That Will Last Throughout Retirement,” Fidelity, 2019

If you have a joint pension:

Start the joint pension payments. The joint pension is not automatic. Your joint pensioner will need to complete and return the paperwork from your company's pension center to start receiving joint pension payments.
Be prepared financially to cover living expenses. Your spouse will need to be prepared with enough savings to bridge at least one month between the end of your pension payments from your company and the beginning of his or her own pension payments.

Financial benefits of working

Make up for decreased value of savings or investments. Interest rates affect both pension lump-sum values and how much income a portfolio can generate. Some people continue to work to make up for poor performance of their savings and investments.

Maybe you took an offer from your company and left earlier than you wanted with less retirement savings than you needed. Instead of drawing down savings, you may decide to work a little longer to pay for extras you’ve always denied yourself in the past.

Meet the financial requirements of day-to-day living. Expenses can increase during your retirement from your company and working can be a logical and effective solution. You might choose to continue working in order to keep your insurance or other benefits - many employers offer free to low cost health insurance for part-time workers.

Emotional benefits of working

You might find yourself with very tempting job opportunities at a time when you thought you’d be withdrawing from the workforce.

Staying active and involved. Retaining employment after your previous job, even if it’s just part-time, can be a great way to use the skills you’ve worked so hard to build over the years and keep up with friends and colleagues.

Enjoying yourself at work. Just because the government has set a retirement age with its Social Security program doesn’t mean you have to schedule your own life that way. Many people genuinely enjoy their employment and continue working because their jobs enrich their lives.

Retirement Guide for Corporate
Employees

Table of Contents

2027 Tax Changes & Inflation

Planning Your Retirement

Retirement planning is a verb. And consistent action must be taken whether you’re 20 or 60.

The truth is that most Americans don’t know how much to save or the amount of income they’ll need.

"A separate study by Russell Investments, a large money management firm, came to a similar conclusion about the potential value of working with a financial advisor."

Why are 401(k)s and matching contributions so popular?

Your Company's Pension Plan

Next Step:

Lump-Sum vs. Annuity

Interest Rates and Life Expectancy

Your Company's 401(k) Plan

Next Step:

Net Unrealized Appreciation (NUA)

IRA Withdrawal

Your Benefits from Your Company

Social Security & Medicare

Divorce

Unlike with a married couple, your ex-spouse doesn’t have to have filed for Social Security

before you can apply for your divorced spouse’s benefit.

Survivor Checklist

Life After Your Career

Sources

Retirement Guide for CorporateEmployees

Table of Contents

2027 Tax Changes & Inflation

Planning Your Retirement

Retirement planning is a verb. And consistent action must be taken whether you’re 20 or 60.

The truth is that most Americans don’t know how much to save or the amount of income they’ll need.

"A separate study by Russell Investments, a large money management firm, came to a similar conclusion about the potential value of working with a financial advisor."

Why are 401(k)s and matching contributions so popular?

Your Company's Pension Plan

Next Step:

Lump-Sum vs. Annuity

Interest Rates and Life Expectancy

Your Company's 401(k) Plan

Next Step:

Net Unrealized Appreciation (NUA)

IRA Withdrawal

Your Benefits from Your Company

Social Security & Medicare

Divorce

Unlike with a married couple, your ex-spouse doesn’t have to have filed for Social Security

before you can apply for your divorced spouse’s benefit.

Survivor Checklist

Life After Your Career

Sources

Retirement Guide for Corporate
Employees