EAG provides you with an opportunity to participate in two different Flexible Spending Accounts (FSAs) administered through Igoe. FSAs allow you to set aside a portion of your income, before taxes, to pay for qualified health care and/or dependent care expenses. Because that portion of your income is not taxed, you pay less in federal income, Social Security and Medicare taxes.
Health Care Flexible Spending Account (Health Care FSA). Use this account to pay for eligible medical, dental, vision, and pharmacy expenses. You can contribute up to $2,650 each year.
Dependent Care Flexible Spending Account (Dependent Care FSA). Use this account if you and your spouse work or attend school full-time to get reimbursed for care of eligible children under age 13 and adult day care expenses for your eligible family members. You can contribute up to $5,000 each year.
CLICK HERE for a complete list of eligible expenses.
IMPORTANT FSA RULES
Because FSAs can give you a significant tax advantage, they must be administered according to specific IRS rules:
Health Care FSA: Unused funds of up to $500 from one year can carry over to the following year. Carryover funds will not count against or offset the amount that you can contribute annually. Unused funds over $500 will NOT be returned to you or carried over to the following year.
Dependent Care FSA: Unused funds will NOT be returned to you or carried over to the following year.
You can incur health care claims through December 31, 2018and must file claims by March 31, 2019.Dependent care claims can be incurred through March 15, 2019 and must be filed by March 31, 2019.
Using Your FSA and Getting Reimbursed
There are several ways for you to be reimbursed from your FSA for eligible expenses. When you have an eligible expense, you can:
Submit a claim for reimbursement and have a check mailed to you or you may elect direct deposit to your checking or savings account.
FSA Benefits Card – If you elect the Healthcare FSA, you will automatically receive the FSA Card in the mail. This card can be used in medical and dental offices, hospitals, healthcare clinics, pharmacies and online pharmacies to purchase services and items eligible under the plan. Simply present your card at the time of service as you would with any credit card.
Save for the future with the EAG 401(k) Retirement Plan or EAG Columbia 401(k) Retirement Plan. Joining gives you:
Choices about how to save—pre-tax and Roth contributions
Choice of managed investment funds
Loan and withdrawal options
24/7 access to your account, planning tools, and calculators
EAG 401(k) Retirement Plan and EAG Columbia 401(k) Retirement Plan services are provided by Empower Retirement.
Age 18 or older
How To Save
You can pick one or more ways to contribute based on what is most important to you. In general, the difference between the contribution types determines when the IRS will require taxes.
Pre-tax. Money is deducted from your paycheck before federal and state taxes are withheld. Why you might choose it: If you want cash flow now, this will allow you to pay lower tax amounts in your paycheck now. Taxes on your deferrals, EAG’s matching contributions, and investment earnings are delayed until you withdraw your money in retirement.
You pay taxes before you defer money into your Roth 401(k). Why you might choose it: If you can afford taxes now, you won’t pay taxes when your contributions or investment earnings are accessed (as long as you have met the five-year qualification period). You do pay ordinary income tax on EAG’s matching contributions when you withdraw your money in retirement. If you believe taxes will be higher in the future and/or your tax rate at the time you take the money out will be lower, the Roth may be worth considering.
In-plan conversion. You can transfer your pre-tax savings into Roth savings within the EAG 401(k) plan. Why you might choose it: You’ll pay federal income tax in the year of conversion and do not pay taxes on the investment earnings after they are converted to Roth.
Regardless of the contribution type you choose, the maximum annual contributions set by the IRS are:
2018 IRS maximum – $18,500
2018 IRS catch-up contribution – if you are 50 years or older you may contribute an additional $6,000
Your contributions are always 100% vested, it is always yours
If you contribute to the 401(k) Retirement Savings Plan you will receive company matching funds. For specific plan details refer to the 401(k) plan provider website for your plan.
There are multiple options for investing your 401(k) funds. Your contributions, EAG’s match, and any funds you roll over from another account can be invested in a either a core portfolio of funds or target date funds that match the year you think you’ll retire.
If you have a balance in a former employer’s retirement plan, you may want to consider consolidating accounts by rolling those funds into your 401(k) Retirement Plan.
Loans and Withdrawals
401(k) accounts are specifically designed for the future and retirement. However, the plan allows for loans or withdrawals under certain circumstances. Loans require repayment with interest and certain withdrawals carry a tax penalty. For details on loans and withdrawals contact the 401(k) plan provider.
Manage Your Account and Plan for Your Future
Empower’s website provides you with tools to manage your account and make plans for your future. Here’s an overview of what you can do:
Change your contribution amount or type (for example, pre-tax or Roth)