Maximizing Your Banner Health 401(k) Near Retirement
As you near the final stretch of your career at Banner Health, optimizing your 401(k) strategy becomes more important than ever. These last few years are a golden opportunity to supercharge your savings and set yourself up for a better retirement.
A Brief Look at Your Banner Health 401(k)
Your Banner Health 401(k) is a great tool to grow your retirement savings. Key features include:
Immediate eligibility for all regular full-time, part-time, per-diem, and flat-rate team members
Employer matching contributions
Immediate 100% vesting for all contributions, including the employer match
Both traditional pre-tax and Roth after-tax contribution options
Professional investment management through Fidelity
True-up matching contributions to ensure you receive maximum benefits
The Power of the Employer Match
Banner Health's employer match is one of the most valuable aspects of your 401(k). Under this program, Banner will match your contributions dollar-for-dollar up to 4% of your eligible compensation. This means every dollar you contribute up to that 4% threshold is immediately doubled. That’s an instant 100% return on your investment!
Maximizing Your Match
To capture the full match, you must contribute at least 4% of your salary to the plan. For example, on a $70,000 annual salary, you would have to contribute $2,800. This would then double your investment to $5,600 in retirement savings.
The True-Up Advantage
Banner's true-up matching contribution provides an additional safety net for employees. After the year ends, Banner will evaluate your total eligible compensation and contributions to determine if you received the maximum possible match. If you didn't receive the full 4% match due to timing issues (perhaps because you increased contributions mid-year or had irregular income), Banner will make a reconciling contribution during the first quarter. This ensures you don't miss out on matching dollars.
2025 Contribution Opportunities: Record-Breaking Limits
The 2025 tax year brings exceptional opportunities for retirement savers, with contribution limits reaching new heights and special provisions for older workers that can dramatically accelerate your savings.
Standard Contribution Limits
For 2025, you can contribute up to $23,500 to your Banner Health 401(k), representing a $500 increase from 2024. Combined with Banner's 4% match, this creates substantial savings potential for your final working years.
Age 50+ Catch-Up Contributions
If you're 50 or older, you can contribute an additional $7,500 in catch-up contributions, bringing your total contribution to $31,000. This is designed to help workers who have a higher earning capacity and greater urgency to maximize their savings as they approach retirement.
Revolutionary "Super Catch-Up" for Ages 60-63
The most significant development for 2025 is the introduction of enhanced catch-up contributions for workers aged 60-63. These individuals can now contribute an extra $11,250 beyond the standard limit, a total of $34,750 annually. This is a true game-changer!
Summary of Age-Based Contribution Limits for 2025:
Under 50: $23,500 maximum
Ages 50-59: $31,000 maximum ($23,500 + $7,500 catch-up)
Ages 60-63: $34,750 maximum ($23,500 + $11,250 super catch-up)
Ages 64+: $31,000 maximum ($23,500 + $7,500 catch-up)
Strategic Tax Planning
Pre-Tax Contributions
Banner's plan requires that your first 4% of contributions must be made on a pre-tax basis. This requirement ensures you're positioned to receive the full employer match while providing immediate tax benefits during your high-earning years.
Roth Contributions
After meeting the 4% pre-tax requirement, additional contributions can be made as either pre-tax or Roth contributions, or a combination of both. This flexibility allows you to create tax diversification for retirement.
Pre-Tax vs. Roth: Which Is Better for You?
Both pre-tax and Roth contributions have their benefits. Which one should you choose? That depends on your current income and plans for the future.
If you have a high income now, maximizing pre-tax contributions can be smart, because the contributions will reduce your taxable income for the current year. However, your withdrawals will be taxed as ordinary income in retirement.
If you would rather reduce your taxes after retiring, Roth contributions may make more sense. You’ll pay taxes on your full income now, but any contributions you make will grow tax-free, and you can make tax-free withdrawals in retirement.
For many workers, making both pre-tax and Roth contributions will give the best of both worlds, offering more flexibility later on. A fiduciary financial advisor can help you make the right choice.
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Investment Strategies for Pre-Retirees
As you approach retirement, you’ll want to balance growing your investments with protecting the wealth you’ve already saved up. Banner Health's partnership with Fidelity gives you plenty of investment options to help you do just that.
Target Date Funds
If you prefer a hands-off approach, Banner's plan automatically invests contributions in target-date funds appropriate for your retirement age. These funds professionally adjust their investment strategy as you approach retirement, becoming more conservative over time.
Strategic Asset Allocation
For anyone wanting more control, consider these approaches for your final working years:
Conservative growth focus: Maintain growth investments while gradually increasing fixed-income allocations as you approach retirement. A common strategy is reducing stock allocation by 1%–2% annually in your final five years.
Sequence of returns protection: Consider having 1-2 years of expenses in more conservative investments to protect against market downturns in early retirement.
Diversification across asset classes: Spread investments across domestic stocks, international markets, bonds, and other asset classes to reduce risk while maintaining growth potential.
Consolidating Accounts
Your final working years are an ideal time to consolidate retirement accounts and optimize your retirement portfolio. If you have 401(k) accounts from previous employers, consider rolling them into your Banner Health plan. This will help you:
Consolidate accounts for easier management
Potentially access better investment options or lower fees
Simplify required minimum distribution planning
Simplify management for beneficiaries
Coordinate your investment strategy
Planning for Required Minimum Distributions
At age 73, required minimum distributions (RMDs) begin. Now is the time to prepare your retirement accounts for this.
Consider converting traditional 401(k) funds to Roth while still working and in higher tax brackets, as Roth accounts aren't subject to RMDs during your lifetime.
Understand that larger traditional pre-tax account balances mean larger RMDs, which can push you into higher tax brackets in retirement.
Try to develop a strategy for which accounts to withdraw from first in retirement to minimize taxes over your lifetime.
Beneficiaries and Estate Planning
When nearing retirement, you’ll want to take steps to ensure your assets will be transferred to your loved ones according to your wishes. Remember to:
Update beneficiary designations after major life events
Consider naming contingent beneficiaries for additional protection
Coordinate 401(k) beneficiaries with overall estate planning
Large 401(k) balances can create estate tax issues for high-net-worth individuals. If that’s you, consider strategies like:
Charitable remainder trusts
Strategic Roth conversions to reduce traditional account balances
Using life insurance to provide liquidity for estate taxes
Working with Professional Guidance
Preparing for retirement involves complex financial decisions that can have a major impact on your retirement security. If you’re nearing retirement age, consider working with a fiduciary financial advisor who can:
Analyze your complete financial picture (including your Banner Health benefits)
Develop distribution strategies to maximize your income in retirement
Coordinate 401(k) planning with your Social Security benefits
Provide ongoing guidance for tax strategies and estate planning
Fiduciary advisors are legally obligated to act in your best interests and can help you navigate the increasingly complex landscape of retirement planning.
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Your Roadmap to Retirement: Final Years Checklist
Year 5 Before Retirement
Maximize employer match contributions
Begin catch-up contributions if eligible
Review and update investment allocation
Consolidate old retirement accounts
Years 3–4 Before Retirement
Increase contribution percentages if possible
Consider Roth conversion opportunities
Update beneficiary designations
Develop a preliminary withdrawal strategy
Years 1–2 Before Retirement
Maximize super catch-up contributions if eligible (ages 60-63)
Finalize investment allocation for early retirement years
Complete final account consolidations
Confirm RMD planning strategy
Final Year
Ensure maximum contribution limits are met
Complete any final Roth conversions
Confirm retirement date timing for optimal benefits
Finalize a withdrawal strategy
At the Finish Line, Every Dollar Counts
Your final years at Banner Health are the perfect time to kick your retirement savings into overdrive. The combination of peak earning potential, enhanced contribution limits, and Banner's generous matching program is a golden opportunity.
The difference between maximizing these final years and simply coasting into retirement can easily represent hundreds of thousands of dollars in additional retirement wealth. Every contribution, every tax strategy choice, and every investment compounds over time to create your retirement lifestyle.
Don't let these crucial years pass without taking full advantage of every opportunity your Banner Health 401(k) provides. The time to act is now. Your future self will thank you for the decisive action you take today.
Ready to Maximize Your Banner Health Retirement Benefits?
Navigating the complexities of 401(k) optimization, catch-up contributions, and retirement tax planning requires expertise and personalized guidance. TrueWealth Financial Partners specializes in helping professionals like you make the most of their final working years and transition confidently into retirement.
Our fiduciary financial advisors understand the unique aspects of Banner Health's retirement benefits and can help you:
Develop a comprehensive strategy to maximize your 401(k) contributions and employer match
Optimize your tax planning with strategic Roth conversions and contribution timing
Create a personalized withdrawal strategy that minimizes taxes and maximizes income
Coordinate your Banner benefits with Social Security and other retirement accounts
Plan for healthcare costs and long-term care needs in retirement
Don't leave your financial future to chance. The decisions you make in your final working years will impact every day of your retirement. Schedule your complimentary consultation today and discover how to make the most of your Banner Health benefits.
Your retirement dreams are within reach. Let us help you turn them into reality.
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