Keith's Note: "The Boeing Supplemental Savings Plan (SSP) can be a powerful tool to boost your retirement savings beyond standard 401(k) limits—but it comes with risks and rules. Understanding your payment options, timing, and tax implications is essential to protect and optimize your Real Wealth." - Keith Demetriades, CFP®, CKA® | Financial Advisor Specializing in Boeing Retirees.
The Boeing Supplemental Savings Plan (SSP) is a non-qualified plan allowing high earners and executives to save beyond IRS limits for the 401(k)/VIP plan.
SSP benefits are designed to “restore” contributions disallowed by those limits so that employees can make additional contributions to their retirement plan and earn additional contributions from Boeing.
What Are The Contribution Types and Taxes Involved?
SSP contributions are pretax, deducted from your paycheck before federal and state income taxes are calculated. Matching contributions made by Boeing are not subject to federal and state income tax withholding at the time they are made, but they are subject to FIC taxes.
Tax on your SSP account is deferred until payment in retirement.
Boeing Payment Rules
Payments begin on the later of:
- The January following the age you elected for payments to start.
- The January following your retirement from the Boeing.
However, payments must begin no later than the January following the year you reach age 70½, if you are no longer employed by the Boeing Controlled Group.
Payment Elections
- Lump Sum This is the default option and will be paid in the January following your retirement.
- Annual Installment Payments for up to 15 years, starting in the January following your retirement.
Generally, you are only allowed to change your payment option once. Also:
- Your new payment election must be submitted at least 12 months before your existing scheduled distribution date.
- The new election cannot take effect for at least 12 months after it is submitted.
- The new election must delay your distribution for at least five years beyond the original distribution date.
What Are The Risks?
The SSP is a nonqualified deferred compensation plan. Unlike the Boeing 401(k), which holds contributions in a separate trust, SSP benefits are paid solely from the general assets of Boeing.
In the event of Boeing’s bankruptcy or insolvency, your SSP benefits may no longer be payable.
Real Wealth Questions
If you’re within 5-10 years of retirement from Boeing, these questions matter:
When will your SSP payments begin?
Have you communicated with Boeing about your preferred SSP payment election?
Are there any potential reasons why you might want to change your SSP payment election in the future?
What is your plan to manage the payout schedule and associated tax impact?
Are your SSP payments aligned with other income sources to manage your total tax liability?
What To Do Next
Your SSP payout elections can significantly affect taxes, cash flow, and how well your retirement income fits with your broader financial plan. Review your current election, confirm when your payments are scheduled to begin, and consider how lump-sum versus installment payments may impact your tax bracket and long-term goals.
If you’d like help evaluating your SSP distribution strategy or coordinating it with your Boeing 401(k), pension, and other income sources, reach out to Keith Demetriades, CFP®, CKA®, a financial advisor specializing in Boeing retirees, for personalized guidance on your next steps.
