The Complete Guide to Your Boeing Retirement Benefits
As a Boeing employee, you have access to a whole suite of great retirement benefits. Understanding these benefits will help you plan your future and grow your wealth. In this guide, we’ll break down the key features of Boeing's retirement benefits so you can make the most of your savings.
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1. Boeing 401(k) Plan
The Boeing 401(k) plan, also known as the Voluntary Investment Plan (VIP), is the cornerstone of your Boeing retirement benefits. Using this plan, employees can invest a portion of their salary into a 401(k) account to save and grow their wealth for retirement. Here’s how it works.
Employee Contributions
You can contribute to your Boeing 401(k) on a pre-tax, Roth, or after-tax basis.
Pre-tax contributions reduce your taxable income now and allow you to delay taxation until after retirement, when you may be taxed in a lower bracket. Your savings will also grow tax-free, meaning that there are no taxes on investment gains, dividends, or interest earned within the account.
Roth contributions are made with after-tax dollars which then grow tax-free. Because your contributions were already taxed, your savings will not be taxed when you make withdrawals after retirement.
Non-Roth after-tax contributions can also grow tax-free but offer different withdrawal options.
The IRS sets annual limits on how much you can contribute to your 401(k). For 2024, the limit is $23,000. Employees who are 50 and older can make additional catch-up contributions of $7,500, raising the total limit to $30,500.
Boeing 401(k) Match
When you invest in your Boeing 401(k), the company will match your contributions dollar-for-dollar up to a cap of 10% of your salary. This means that if you contribute 10% of your salary every year, Boeing will double your retirement savings for free!
If your savings rate fluctuates throughout the year, the match true-up ensures you receive the highest possible match at year-end, accounting for any variances in your contributions.
PRO TIP: The Boeing 401(k) Student Loan Match lets you count qualified student loan payments towards your company match. This innovative feature helps you pay off student debt while still receiving retirement savings benefits!
Investment Options
The Boeing 401(k) plan lets you choose from a wide range of investment options, including:
Target date funds: Also known as lifecycle funds, These are designed to automatically adjust the asset mix as you approach your retirement date, reducing risk over time.
Index funds: These funds track specific market indexes and offer a diversified investment at a low cost.
Actively managed funds: These funds are personally managed by an account manager who works on your behalf.
Immediate Vesting
Unlike many companies that require a vesting period, Boeing’s contributions are immediately 100% vested. This means you have full ownership of the company’s contributions as soon as they are made! When you retire or leave the company, you will have immediate access to your funds.
2. Boeing Defined Benefits Pension Plan
Boeing previously offered a defined benefit pension plan, but this is generally no longer available to new employees. Most current employees participate in the 401(k) plan. However, if you were hired before certain cut-off dates, you might still be eligible for pension benefits under the old plan.
Overview
Boeing’s defined benefit pension plan provides a guaranteed monthly income in retirement based on a formula that considers your years of service and final average salary. Eligibility for the pension plan depends on your hire date and employment status. Employees hired before January 1, 2009, may still be eligible for pension benefits.
Five-Year Vesting period
Typically, you become vested in the pension plan after five years of service. Once vested, you are entitled to receive benefits upon retirement, even if you leave Boeing before reaching retirement age.
Boeing Pension Payout Options
When making withdrawals from your Boeing pension plan, you have a few options for how you want to receive your funds.
Single-life annuity (monthly payments): This option provides monthly payments for the rest of your life. Upon your death, no further benefits are paid.
Lump-sum payment: Some employees may have the option to take a lump-sum payment instead of monthly annuity payments. This can provide flexibility but also requires careful management to ensure the funds last throughout retirement.
Joint and survivor annuity: This option provides a reduced monthly benefit for your life, with continuing payments to your spouse or another beneficiary after your death. The percentage of the benefit that continues to your survivor can vary (e.g., 50%, 75%, or 100%).
Coordination with Your 401(k) Plan
Boeing has largely transitioned to offering defined contribution plans like the 401(k) for new employees. However, some older employees can maintain both.
For those eligible, the Boeing defined benefit pension plan helps support the 401(k) plan by providing a stable income floor in retirement. Combining these benefits can give you a more reliable income after retirement.
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3. Boeing Supplementary Savings Plan (SSP)
The Boeing Supplemental Savings Plan (SSP) offers additional opportunities to save for retirement beyond the limits of your 401(k). If you expect to max out your Boeing 401(k) plan, you can invest more of your salary into an SSP plan. Like the 401(k), contributions to the SSP can be made on a pre-tax, after-tax, or Roth basis.
SSP Eligibility
The SSP is designed for employees whose compensation exceeds certain thresholds, letting them save more income than their 401(k) allows. This is particularly beneficial for high earners within the company.
Non-Qualified Plan
The main downside of the SSP is that it is a non-qualified deferred compensation plan. That means it is not as “safe” as a 401(k) plan. If Boeing went bankrupt, your SSP funds would not be secured. However, the SSP does allow for greater flexibility and higher contribution limits than a traditional 401(k).
SSP Investment Options
The SSP offers investment options similar to those available in the 401(k) plan, including various funds that range from conservative to aggressive. This lets you tailor your investment strategy to your personal risk tolerance and retirement goals.
Flexible Withdrawals
When you’re ready to withdraw your savings, you can choose from several distribution options, including a lump-sum payment or monthly installments.
4. Boeing Mega Backdoor Roth Program
Like the Boeing SSP, the Mega Backdoor Roth gives employees a chance to save more than a 401(k) plan will allow. With the Mega Backdoor Roth program, you can make after-tax contributions to their 401(k) plan, which can then be rolled over into a Roth 401(k) or Roth IRA. These contributions are made with after-tax dollars.
Higher Savings Limits
For 2024, the combined contribution limit for 401(k) plans, including pre-tax, Roth, and after-tax contributions, is:
$69,000 for employees under 50
$76,500 for those 50 and older.
This includes employee contributions, employer matching, and after-tax contributions.
Tax-Free Growth and Withdrawals
Once after-tax contributions are rolled into a Roth account, they grow tax-free. Qualified withdrawals from Roth accounts in retirement are tax-free, provided certain conditions are met, such as the account being held for at least five years and the account holder being at least 59 1⁄2 years old.
Mega Backdoor Roth Steps
To make use of the Mega Backdoor Roth program at Boeing, you will follow these steps:
Max out your regular 401(k) contributions. (For 2024, this limit is $23,000, or $30,500 if you are 50 or older.)
Start making after-tax contributions to your 401(k). The total annual limit for combined contributions is $69,000 (or $76,500 if over 50).
Convert the after-tax contributions to a Roth 401(k) or Roth IRA. This can be done through an in-plan Roth conversion or by rolling over the after-tax contributions to a Roth IRA. (Taxes may be owed on any earnings accrued before the conversion.)
PRO TIP: Not all 401(k) plans offer the necessary features for a Mega Backdoor Roth. You will need to ensure that your plan allows after-tax contributions and either in-plan Roth conversions or in-service withdrawals to a Roth IRA. Consult a qualified financial advisor to learn more.
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5. Boeing Health and Welfare Benefits
Boeing provides ample health insurance and welfare benefits to support the well-being of employees and their families. These benefits ensure you have access to high-quality healthcare and various support services.
Medical Benefits
Boeing's medical plans cover healthcare services at little or no cost to employees. This includes:
Routine check-ups
Vaccinations
Doctor visits
Emergency care
Hospital stays
Surgery
Behavioral health services
Prescription medications
Employees can choose from a broad network of providers to ensure they receive the care they need.
Dental and Vision
Boeing's dental plans, provided by Delta Dental, cover routine exams and cleanings, as well as restorative procedures like fillings, crowns, and orthodontia.
Boeing’s vision plan includes coverage for eye exams, and special pricing on glasses and contact lenses, provided through Davis Vision.
Disability Coverage
Full-time Boeing employees have access to short-term and long-term disability benefits. This will provide partial income replacement if you are unable to work due to illness or injury. Additional long-term disability coverage can be purchased if needed.
Life Insurance
Boeing offers basic life Insurance and basic accidental death & dismemberment (AD&D) coverage at no cost to employees. Supplemental life insurance and AD&D coverage are also available for a fee.
Health Savings Account (HSA)
If enrolled in Boeing’s Advantage+ health plan, you can contribute to a Health Savings Account HSA, which allows you to pay for qualified medical expenses with pre-tax dollars. Boeing may also contribute to your HSA. The contribution limits for 2024 are $4,150 for individual coverage and $8,300 for family coverage, with an additional $1,000 catch-up contribution for those aged 55 and older.
Flexible Spending Accounts (FSA)
Flexible Spending Accounts (FSA) are also available to help pay for health care and dependent care expenses with pre-tax dollars. The Health Care FSA limit for 2024 is $3,200, and the Dependent Care FSA allows contributions up to $5,000 annually, subject to certain limitations based on salary.
Specialized Health Programs
Eligible Boeing employees have access to a variety of specialized health programs, such as:
Nationally recognized medical centers for specialized care such as cardiac, orthopedic, spine, bariatric, and transplant services.
A primary nurse program featuring dedicated nurses who can help manage complex health conditions such as diabetes, hypertension, cancer, and more.
Free medical advice and second opinions from leading physicians who can be reached via phone or email (Teladoc).
Virtual primary care and other health services through providers like 98point6, Vida Health, Hinge Health, and Livongo.
Voluntary Benefits
Boeing offers a range of voluntary benefits through MetLife, which employees can purchase to enhance their coverage. Options include:
Critical illness insurance
Accident insurance
Hospital indemnity insurance
Legal plans
Identity theft and fraud protection
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Make the Most of Your Boeing Retirement Benefits with Help from TrueWealth!
Boeing’s retirement benefits provide employees with a great opportunity to save for their golden years. By taking full advantage of benefits available, you can give yourself the gift of a secure financial future.
If you want to make the most of your Boeing retirement benefits, we can help. At TrueWealth Financial Partners, we are well-versed in the ins and outs of Boeing employee benefits. We will take the time to understand your needs, then get to work crafting a custom strategy to help you reach your goals.
Are you ready to take control of your financial future? Contact us today to schedule a free introductory meeting. Schedule a free consultation or call us at 425-615-7360 today.
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