Last Updated on July 27, 2023 by Ben
It’s never untimely or too early to plan for retirement! Cigna Retirement has several different cost-effective health insurance plans for early retirees. And they can help you make financial sense of the many choices you’ll face. This retirement describes the plans we offer and how they can help you achieve your retirement health and financial goals.
Cigna 401(k) Plan
A 401(k) tax-deferred retirement savings plan is available to employers and individuals. An employee’s contributions to the plan are made through payroll deduction and are placed in an individual’s account. The money in the account can pull out or maybe withdrawn if you retire, get fired, die, or become disabled.
To enroll in a Cigna 401(k), you must be an active Cigna employee, have at least 18 years of age, and have got or received at least one hour of credit during the past year. To be an eligible active Cigna employee, you must work a minimum of 20 hours per week.
Your Plan Contributions
Your plan contributions are the dollars you are willing to pay into your Cigna 401(k) every week. These dollars are taken from your paycheck before taxes are withheld. We call these dollars “pretax” dollars because you don’t pay taxes on them until you cash them out in retirement. Your pretax dollars expire if you are not a Cigna employee at age 50, and you must enroll at that time.
Company Matching Contributions
Whenever you work for a company that matches contributions to your account, the money is automatically sent into an outside pool of funds. This pool is invested within the employer’s plan and is not part of your retirement accounts. When you are not sure if your employer offers a matching plan, you can check with your human resources department.
You have the option to borrow from your 401(k) up to the maximum you have contributed. Loans must be for a “rollover” to a different investment option within your 401(k), such as from a money market fund to a business stock fund. It would be best if you were not under _ (under age 50) to be able to borrow from your 401(k).
You can start to begin taking distributions from your 401(k) account when you retire, and your distributions will be based on your account balance at retirement. You can choose to take retirement distributions in two ways: a lump-sum payment or regular payments.
Distributions from a 401(k) are taxable distributions, meaning that they will be reported on your tax returns, and you will pay tax on them. If you have reached age 59 you will also be required to take a required minimum distribution (RMD) from your 401(k).
Your investments in your 401(k) may qualify for tax-deferred distributions. These distributions, called “imputed distributions.” are not taxed at the federal level, though state tax laws may apply. Upon reaching age 70.5, you may start taking required minimum distributions (RMD) from your 401(k).
Final Thoughts – Cigna Retirement
The Cigna 401(k) is a powerful retirement savings plan. By enrolling in the plan, you receive a high level of convenience and cost-effective service from Cigna. Plus, the plan may make a significant contribution toward your retirement. The way you invest your money in your 401(k) will make a big difference in your retirement, so consider the guidance of your financial professional when deciding how to invest your money.