Boeing Retirement Changes 2024
As a Boeing employee, staying up to date on any changes to your retirement plan is always wise. With several significant updates this year, it's essential to understand how these changes may impact your retirement strategy.
Here are all the Boeing retirement changes you should be aware of in 2024.
2024 Boeing Retirement Changes
Boeing 401(k) Limit Increase
As a 401(k) program, the Boeing Voluntary Investment Plan (VIP) is subject to IRS contribution limits. In 2023, the limit was $22,500 for employees under the age of 50. In 2024, that limit is increasing to $23,000. Employees age 50 or older can still invest an additional $7,500 through catch-up contributions. That comes to a grand total of $30,500! This will allow you to save and invest even more for retirement.
Transition to Fidelity Investments
In January 2022, Boeing transitioned its retirement benefits administration to Fidelity Investments. Since then, employees have been able to manage their 401(k) plans through the Fidelity NetBenefits website. This transition was designed to streamline and improve management for the Boeing 401(k) program.
Fidelity also helps manage Boeing’s Supplemental Savings Plan (SSP) and Mega Backdoor Roth program.
Boeing VIP Matching Contributions Increase
The Boeing VIP already had a generous matching policy, and it’s only gotten better. Previously, Boeing would match 75% of the first 8% of an employee's salary contributed to a Boeing 401(k) plan. But in 2022, Boeing raised that match to 100% of all employee contributions up to a cap of 10% of their salary. That means that if you invest 10% of your salary into the Boeing VIP, you can double your retirement savings for free!
Healthcare and Insurance Adjustments
Understanding your employee healthcare benefits is crucial as you approach retirement. In 2024, Boeing has made several updates to its healthcare plans. For instance, the annual deductible for the standard health plan will increase from $1,500 to $1,600 for individual coverage and from $3,000 to $3,200 for family coverage. Additionally, co-insurance rates will see slight adjustments, impacting out-of-pocket costs for medical services.
IAM Union Negotiations
Boeing is currently negotiating with the International Association of Machinists (IAM). These negotiations may bring changes to employee benefits and retirement plans for union members. For example, Boeing is already discussing adjustments to pension contributions and healthcare benefits.
If you are a union member, you will want to stay informed as these negotiations develop. The outcome could impact your retirement benefits and overall financial planning.
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Financial Planning Tips for Boeing Employees
In light of these Boeing retirement changes, there are steps you can take to optimize your plans for the future.
Assess your finances: Start by taking stock of your savings, investments, debts, and assets. Creating a detailed budget can provide clarity on your spending habits.
Set clear retirement goals: Define your retirement vision, including where you want to live, travel plans, hobbies, and potential healthcare needs.
Maximize retirement contributions: Make the most of your 401(k) and other retirement accounts. Invest at least 10% of your salary every year to max out your Boeing company match. If you’re close to retirement age, use catch-up contributions to boost your savings.
Review investment portfolio: Adjust your investment portfolio based on your risk tolerance and retirement timeline. Consider diversifying toward more stable, low-risk investments as you approach retirement.
Evaluate Social Security timing: Deciding when to start claiming Social Security benefits can impact your monthly payouts. Delaying benefits until full retirement age or later can result in higher payments. For example, delaying Social Security benefits from age 62 to 70 can increase your monthly benefit by up to 76%.
Explore healthcare options: Research your health insurance options, especially if you’re not yet eligible for Medicare. Consider long-term care coverage to protect against potential medical expenses.
Estate planning: Update your estate plan, including wills, beneficiaries, and powers of attorney, to ensure your wishes are documented and your loved ones are protected.
Consult a financial advisor: Working with a financial advisor can help you get the most out of your investments. Plus, your financial advisor can help keep you up to date on any future Boeing retirement changes.
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Boeing Retirement Changes FAQs
What are the new 401(k) contribution limits for Boeing employees in 2024?
In 2024, the contribution limit for Boeing's Voluntary Investment Plan (VIP) 401(k) has increased to $23,000 for employees under 50. Employees aged 50 or older can contribute an additional $7,500, bringing their total limit to $30,500.
How does Boeing's 401(k) matching contribution work in 2024?
Boeing matches 100% of employee contributions up to 10% of their salary. This means if you contribute 10% of your salary, Boeing will match it entirely, significantly boosting your retirement savings.
Does Boeing still offer a defined-benefit pension plan for employees?
Boeing no longer offers a traditional defined-benefit pension plan to new employees. Instead, Boeing has transitioned to a 401(k) retirement plan for new hires, which includes company contributions and matching features.
However, Boeing does still maintain a defined-benefit cash balance pension plan known as the Pension Value Plan (PVP) for certain non-union employees who were enrolled before the plan was frozen. This plan provides a monthly benefit based on years of credited service and compensation. New employees are not eligible to join this plan.
What changes have been made to Boeing’s healthcare plans for 2024?
Boeing has increased the annual deductible for the standard health plan from $1,500 to $1,600 for individual coverage and from $3,000 to $3,200 for family coverage. Additionally, there have been slight adjustments to co-insurance rates, which may affect out-of-pocket costs for medical services.
Are there any special programs or features available in Boeing's new 401(k) plan?
Yes, Boeing's 401(k) plan offers features such as the Student Loan Match, which allows eligible employees to count their student loan payments toward their 401(k) match. Additionally, the plan includes immediate 100% vesting of Boeing’s contributions, various contribution options (pre-tax, Roth, and after-tax), and a range of investment options.
What investment options are available within Boeing's 401(k) plan?
Boeing’s 401(k) plan offers a variety of investment options, including index funds tied to retirement dates, actively managed funds, and stable value funds. Employees can choose a mix of these options based on their risk tolerance and retirement timeline. Fidelity provides tools to help employees select the best investment strategy.
What healthcare options are available for Boeing retirees now?
Boeing offers a range of healthcare options for retirees, including medical, dental, and vision plans. Retirees not yet eligible for Medicare can access various health programs, including virtual care and specialized support for chronic conditions. For those approaching Medicare eligibility, Boeing provides resources to help choose the best Medicare Advantage supplemental plans.
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Let TrueWealth Help You Prepare for a Better Future
Navigating these Boeing retirement changes can be complex. Fortunately, you don't have to do it all alone.
At TrueWealth Financial Partners, we specialize in helping Boeing employees like you understand and optimize your retirement strategy. Our team of experienced financial advisors is dedicated to providing personalized guidance tailored to your unique needs and goals.
Whether you're looking to maximize your 401(k) contributions, understand the impact of recent healthcare adjustments, or explore the best investment options, TrueWealth is here to help. We offer comprehensive financial planning services that include retirement planning, investment management, and estate planning. Our goal is to ensure you have a clear, actionable plan that aligns with your vision for the future.
Contact TrueWealth Financial Partners today to schedule a free consultation. We’ll be happy to answer any questions you have about the recent Being retirement changes — or anything else!
Let’s talk.