Boeing Strike 2024: How Does the Strike Impact My Retirement Benefits?
In September 2024, over 30,000 members of the International Association of Machinists and Aerospace Workers (IAM) walked off the job, launching Boeing's first major strike in 16 years. The striking workers are fighting for higher wages, better working conditions, and more retirement benefits.
With negotiations ongoing, many Boeing employees are left wondering: how will this strike affect their retirement benefits and pensions?
Key Takeaways
The International Association of Machinists and Aerospace Workers (IAM) is currently striking, demanding higher raises in pay and improved benefits.
This strike could reshape retirement benefits for employees, potentially reinstating pensions and improving 401(k) matching contributions.
Furloughed and striking employees may experience a pause in 401(k) contributions, affecting their retirement savings trajectory.
Uncertainty around pensions and healthcare benefits may lead some employees to delay retirement or adjust their long-term financial plans.
The Current Situation: What Led to the 2024 Boeing Strike?
The current Boeing strike is the culmination of months of contentious negotiations between Boeing management and the IAM, which represents more than 30,000 employees. This labor action follows years of frustration over issues such as wages, benefits, and Boeing’s overall treatment of its workforce.
Contract Rejection and Key Issues
The strike was triggered when 95% of union members voted to reject a tentative contract offer. The offer included a number of potential benefits for Boeing employees, including:
A 25% wage increase spread over four years
Reduced employee healthcare contributions
Enhanced 401(k) retirement contributions
However, IAM workers were dissatisfied with the contract, especially its failure to reinstate a traditional pension plan. The union had originally sought a 40% wage increase and the return of defined-benefit pension plans, which were phased out a decade ago.
Long-Standing Employee Frustrations
The strike isn't just about this latest round of negotiations — it's a reflection of years of growing tensions. Back in 2014, Boeing reopened its labor contract and forced employees to accept changes to healthcare and pension benefits, shifting workers from traditional pensions to a 401(k) plan.
This move has since been a source of deep resentment among Boeing's employees, many of whom argue that defined benefit pensions provide better long-term security than 401(k) plans. While 401(k) benefits are subject to personal investment strategies market fluctuations, defined benefit pension plans provide a guaranteed stream of income in retirement.
Boeing Safety Issues
Boeing’s management is also facing significant financial and operational challenges, complicating the negotiation process. The company is still recovering from the fallout of the 737 Max crashes in 2018 and 2019, which caused significant reputational damage and financial losses. More recently, Boeing has had to deal with additional safety concerns, such as a panel blowing off a 737 Max 9 mid-flight in January 2024.
Financial Strain
In addition to these safety concerns, Boeing’s financial health has been under strain. The company has suffered significant losses in recent quarters, and there is increasing pressure to reduce costs. As a result, Boeing’s leadership is balancing employee demands with the need to preserve cash flow and reassure investors that the company is on a path to recovery.
Management Turnover and Labor Relations
Complicating matters further is the recent leadership change at Boeing. The strike is the first major test for Kelly Ortberg, who took the reins of the company shortly before negotiations began. Ortberg has publicly urged employees to accept the company's contract offer, warning that a prolonged strike could damage Boeing’s recovery efforts and jeopardize its relationships with key customers.
Union Leaders Not Backing Down
Despite these concerns, union leaders have remained resolute in their demands. They argue that Boeing’s employees deserve a fair share of the company’s profits, particularly after years of contributing to its success. Union members point to the sacrifices they've made over the years — accepting pension cuts and agreeing to work under increasingly difficult conditions — as reasons for standing firm during the strike.
Past Boeing Strikes and Their Impact on Retirement
Boeing has a history of long labor strikes, and their outcomes have had lasting effects on employee benefits. In the 2008 strike — which lasted nearly two months —employees successfully negotiated wage increases and better retirement provisions after a prolonged work stoppage. However, the company’s financial situation today is more precarious, making it harder for employees to secure significant changes in retirement benefits without risking further delays in negotiations.
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How the 2024 Strike Could Impact Retirement Benefits for Boeing Employees
Could the Boeing Pension get changed?
One of the key sticking points in negotiations is the demand for reinstatement of traditional pensions. For years, Boeing workers have expressed frustration with the company’s shift from pensions to a 401(k)-based system, which relies heavily on market performance and individual contributions.
While Boeing has offered to increase its 401(k) matching contributions, many employees feel this does not compensate for the long-term security that a pension plan provides. Defined-benefit pensions offer predictable, steady income in retirement, regardless of stock market fluctuations. In contrast, 401(k) plans are subject to the ups and downs of the market, which can create uncertainty, especially for employees close to retirement.
The outcome of the strike could determine whether Boeing revisits the idea of reinstating pensions. If the union is successful in its negotiations, it could set a precedent for other companies in industries where pensions have been scaled back. However, if Boeing holds firm on its 401(k)-only structure, workers may be forced to accept the status quo.
Could the Boeing strike change 401(k) Contributions?
Boeing’s latest offer includes increasing its contributions to employee 401(k) plans. However, until a new contract is signed, these enhanced contributions remain on hold, leaving employees in limbo. Workers who were counting on enhanced 401(k) matches to boost their savings may need to adjust their retirement plans in the short term, as contributions may not increase until an agreement is reached.
Boeing Furloughed Workers
Due to the strike, Boeing has furloughed tens of thousands of workers in an effort to cut costs and manage the production slowdown. Furloughed employees are placed on a rotating schedule, where they may work a reduced number of weeks, but for many, this still means significant time away from work.
Unfortunately, employees who are furloughed or on strike cannot contribute to their 401(k) plans. This could mean months of lost contributions, which, depending on the duration of the strike, could significantly impact their retirement savings trajectory. For employees relying heavily on regular contributions to grow their retirement funds, this period of inactivity in their 401(k) could reduce their long-term savings.
Could the Boeing strike change Healthcare Costs for retirees?
Healthcare costs are often one of the largest expenses retirees face, as many Boeing employees know. The company’s tentative contract includes reduced healthcare costs for employees, which would allow workers to save more for their 401(k)s or other retirement funds. However, as long as the strike continues, these improvements remain out of reach, potentially delaying the financial relief employees were counting on.
Uncertainty about future healthcare benefits could also complicate the plans of employees considering early retirement. Workers may choose to delay retirement until the outcome of the strike becomes clear, as they await details on whether healthcare costs will decrease or remain the same.
The Broader Impact of the Strike on Retirement Security
Beyond the immediate impacts on pensions and 401(k) contributions, the strike may also have broader consequences for retirement security. Prolonged labor disputes can lead to financial strain on both the company and its employees. Boeing, already facing financial difficulties due to safety issues and competition from Airbus, is under pressure to cut costs. The longer the strike drags on, the more difficult it may become for Boeing to meet union demands, including those related to retirement benefits.
For employees, a long strike means more missed paychecks and potentially fewer contributions to their retirement plans. Even with strike pay, many workers may find it challenging to maintain their current level of savings, especially if the strike continues for weeks or months.
In the worst-case scenario, a prolonged strike could lead Boeing to make even more aggressive cost-cutting measures, further jeopardizing the retirement security of its employees. However, if the union succeeds in securing better retirement benefits, it could set a new standard for how companies in the aerospace industry — and beyond — approach retirement planning and employee benefits.
Concerned about your 401(k) during the strike? We can help you navigate the changes.
TrueWealth Financial Partners helps Boeing employees like you plan for a secure and comfortable retirement. Reach out today to ensure your savings stay on track while the strike lasts.
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Retirement Planning During the 2024 Boeing Strike: How to Protect Your Savings
For Boeing employees affected by the strike, careful retirement planning is more important than ever. Here are some key considerations to protect and optimize your retirement plans during this turbulent period.
1. Maximize 401(k) Contributions (If Possible)
Furloughed employees and those on strike are temporarily barred from contributing to their 401(k) plans. However, employees who are still working should maximize their contributions. This lets you take full advantage of any available employer matches, which can mitigate the long-term impact of contribution gaps during the strike.
For most employees, the maximum annual contribution to a 401(k) is $23,000 in 2024. Employees who are 50 or older can add an extra $7,500 in catch-up contributions for a total of $30,500.
PRO TIP: Keep an eye on how the results of this strike impact 401(k) matches and other policies, and be ready to adjust your contributions accordingly.
2. Review Your Investment Portfolio
Even if your 401(k) contributions are on hold during the strike, now is a good time to review your investment portfolio. If your portfolio is heavily weighted in Boeing stock or other high-risk assets, consider diversifying it. A well-balanced portfolio will provide better protection during uncertain times. A fiduciary financial advisor can help you make smart investments to avoid risks and protect your savings.
3. Consider Other Options for Retirement Savings
If you're furloughed or on strike — and thus unable to contribute to your Boeing 401(k) — consider opening or contributing to an individual retirement account (IRA) to maintain some level of savings. Traditional and Roth IRAs are excellent supplemental vehicles that don’t depend on your employment status.
Putting money into an emergency fund is also a good idea. While it’s not a direct retirement strategy, having accessible funds on hand can prevent you from needing to dip into retirement accounts prematurely, avoiding penalties and keeping your long-term savings intact.
4. Prepare for Healthcare Cost Changes
Healthcare costs play a significant role in your retirement planning. Boeing’s offer includes a reduction in employee healthcare contributions, but until the strike is resolved, those changes remain uncertain.
Review your current plan’s costs and coverage, and consider supplemental healthcare options like Medicare or private insurance to ensure you’re covered without depleting your retirement funds. Also, consider contributing to a health savings account (HSA) as a tax-advantaged way to save for future medical expenses.
5. Review Your Retirement Timeline
As things stand, it’s hard to predict what Boeing’s retirement policies might look like when the ongoing strike is resolved. If Boeing and the union reach an agreement quickly, employees could see improved 401(k) contributions, reduced healthcare costs, and the possibility of reinstating pensions. However, if negotiations drag on, there could be long-term effects for everyone.
With so much of Boeing’s retirement benefits in flux and subject to change, some employees may need to adjust their retirement plans. If you were planning to retire soon, consider postponing that decision for now. You may need to adjust your savings goals or work longer than expected to compensate for the strike-related disruptions.
6. Consult a Fiduciary Financial Advisor
No matter how you’ve been affected by the 2024 Boeing strike, working with a trusted financial advisor is always a good idea. An experienced fiduciary financial advisor can:
Help you adjust your retirement plans as things change
Advise you on how to manage your 401(k) contributions, IRAs, and other savings vehicles during the strike
Optimize your investment strategy
Guide you toward a more secure future and long-term financial health
In short, your financial advisor can help protect your savings and give you true peace of mind.
Weather the Storm with Help from TrueWealth
As the Boeing strike unfolds, the uncertainty surrounding retirement benefits will only grow. To make the most of your 401(k) and safeguard your long-term savings, having the right financial strategy is key.
At TrueWealth Financial Partners, we understand the unique challenges Boeing employees are facing. Our fiduciary advisors are here to provide personalized advice, ensuring your retirement strategy is resilient through these turbulent times.
Schedule a free consultation today to gain the confidence you need for a better future.
Plan for the Unexpected with Help from TrueWealth
At TrueWealth Financial Partners, we help clients navigate uncertainty with strategies tailored to their unique needs. Our fiduciary advisors will work with you to optimize your retirement savings, adjust your investment portfolio, and provide peace of mind during times of change. Schedule a consultation today and
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FAQs About the Boeing 2024 Strike
Will the 2024 Boeing strike affect my pension or 401(k) contributions?
The strike could affect both pensions and 401(k) contributions for Boeing employees. One of the union's key demands is the reinstatement of pensions, which Boeing phased out nearly a decade ago. The outcome of the strike could determine whether pensions are brought back or if Boeing continues with its 401(k)-based retirement system.
Can I still retire from Boeing during the strike?
Yes, you can still retire during the strike. However, the uncertainty surrounding retirement benefits could make it a more complex decision. If you retire now, you may not benefit from potential improvements to pensions or 401(k) contributions once the strike is resolved.
Consider delaying your retirement until the strike is over and the new contract terms are clear. This could allow you to take advantage of improved benefits and ensure your financial security in retirement.
Will my 401(k) matching contributions continue during the strike?
No, Boeing will not make any contributions to your 401(k) or other retirement plans during the strike. This includes company matching contributions and any special retirement contributions that were part of your previous compensation package.
Can I contribute to my Boeing 401(k) during the strike?
If you are still employed and working at Boeing, you can continue to make contributions to your 401(k). However, Boeing will not make any matching contributions until the strike is over. If you are on strike or furloughed, you will not be able to contribute to your Boeing 401(k) at all.
Can I catch up on contributions once the strike is over? What about matching contributions?
No, employees will not have the opportunity to retroactively catch up on contributions when the strike ends. You will also not receive back-payments for any matching contributions that were withheld during the strike.
If you’re concerned about the missed contributions and their impact on your retirement, you may want to explore other investment or retirement accounts to protect your savings. A fiduciary financial advisor can help you optimize your plan for better savings and growth.
What should I do if my portfolio is heavily invested in Boeing stock?
If your investment portfolio is heavily weighted toward Boeing stock, this may expose you to greater financial risk during the strike. Corporate disruptions, like strikes, can lead to volatility in a company’s stock price. It’s a good idea to review your portfolio and consider diversifying your investments to reduce your overall risk.
Will my healthcare benefits continue during the strike?
If the strike lasts into October, your Boeing-paid healthcare benefits will end. This includes:
Medical
Dental
Vision
Prescription drug coverage
This will affect you and any dependents covered under your plan. However, you can continue your coverage by paying for it through COBRA, which allows you to keep your benefits, but at your own expense. COBRA can be a costly option, so it's important to plan accordingly if you choose this option.
What happens to my healthcare benefits when the strike is over?
Healthcare benefits are a major point of contention in the ongoing negotiations. Boeing has proposed reducing employee contributions to healthcare costs, but potential improvements will remain on hold under the strike ends.
If you’re on strike or furloughed, it’s important to keep track of any changes to your healthcare plan, and explore other healthcare options, like Medicare or private insurance, if you’re nearing retirement.
Will Boeing reimburse my healthcare costs if I’m not covered during the strike?
No, Boeing will not reimburse healthcare costs for employees not covered by an active Boeing-sponsored plan.
Can I apply for unemployment benefits during the strike?
Striking workers are generally not eligible for unemployment benefits in states like Washington, Oregon, and California. However, if you were laid off before the strike or are facing partial unemployment not directly related to the strike, you may qualify for unemployment under different terms. Check with your state unemployment agency to see if you qualify.
What happens to life and accidental death benefits during the strike?
Unfortunately, Boeing will no longer cover your life, accidental death, and dismemberment benefits during the strike. If you wish to maintain these benefits, you would need to pay for them yourself while on strike. This is important if you rely on these benefits for financial security.
Will my employment status be affected after the strike if I participate?
No, participating in the strike will not jeopardize your employment with Boeing. Strikes are protected by labor laws. Once the strike concludes, employees will be reinstated under the new contract terms. However, if you engage in illegal activities, such as crossing the picket line without proper authorization or participating in unauthorized work stoppages, there could be employment consequences. Always follow union guidelines and relevant laws to ensure your employment is protected.
What happens if I was on leave or scheduled for a layoff before the strike?
If you were already on leave or were laid off before the strike began, your eligibility for unemployment or other benefits will depend on your status at the time of the strike. Those who were laid off before the strike might still qualify for unemployment benefits, while those with a scheduled return to work may be considered part of the strike once they return. It’s best to contact your state’s unemployment office for specific guidance.
How long will the 2024 Boeing strike last?
This depends on how quickly Boeing and the striking union can come to an agreement. Historically, Boeing strikes have varied in length. The 2008 strike lasted almost two months, while many strikes were concluded within a week or two. Unfortunately, the current strike involves complex and high-stakes negotiations, which may drag the strike out longer than usual.
Can non-union employees continue to work during the strike?
Yes, employees not represented by IAM 751 & W24, as well as managers, will continue working during the strike.
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